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PETITIONER: SINDHI SAHITI MULTIPURPOSE  TRANSPORT  CO-OPERA-TIVE SOCTETY

       Vs.

RESPONDENT: STATE OF MADHYA PRADESH & ORS.

DATE OF JUDGMENT16/11/1976

BENCH: RAY, A.N. (CJ) BENCH: RAY, A.N. (CJ) BEG, M. HAMEEDULLAH SINGH, JASWANT

CITATION:  1977 AIR  441            1977 SCR  (2)  86  1977 SCC  (1) 403

ACT:             Motor Vehicles Act,  1939  Chapter IV-A,  Scheme  under,         Whether  open to constitutional challenge---S.  68D.  objec-         tions against scheme, scope of.

HEADNOTE:             The Government of Madhya Pradesh proposed to pass scheme         No.  9-M; regarding the nationalisation of  road  transport.         The  scheme was approved and notified in the State  Gazette,         after  the appellant’s objections made under section 68D  of         the Motor Vehicles Act, 1939, had been heard.  The appellant         flied  a  writ petition in the High  Court  challenging  the         Government’s rejection of his objections, and also  impeach-         ing the scheme as published in the gazette.  The High  Court         dismissed the petition holding that, as Chapter IV-A of  the         Act has been included as Entry 125 in the Ninth Schedule  to         the  Constitution,  the scheme cannot be challenged..         Dismissing the appeal the Court,             HELD:  1.  Though Chapter IV-A of the Act is not open to         any  constitutional challenge, it is open to  any  aggrieved         person to challenge any scheme on the ground that it is  not         a valid scheme as required by the provisions of Chapter IV-A         of the Act.  [87 C-D]             2.  Under  section  68D of the Act the  only  scope  for         objection  is whether the scheme is efficient  and  adequate         and not whether exclusion is complete or partial. [91 A-B]             Objections  are  confined only to the  four  grounds  of         efficiency,  adequacy,  economy and proper  coordination  of         road  transport service.  There was never any  objection  to         the  Scheme  on exclusion related to any of  these  grounds.         [90 D-E]             Capital  Multipurpose  Co-operative Society  Bhopal  and         Ors.  v. The State of M.P. & Ors. [1967] 3 S.C.R.  329,  ap-         plied.             H.C.  Narayanappa & Ors. v. The State of Mysore &  Ors.,         [1960] 3 SC.R. 742, referred to:

JUDGMENT:             CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 1166  of

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       1976.             Appeal  by  Special Leave from the  Judgment  and  Order         dated  the 16th September, 1976 of the Madhya  Pradesh  High         Court in Misc. Petition No. 1004 of 1974.             M.N.  Phadke,  S.Q. Hasan and A.C. Ratnaparkhi  for  the         appellant.             Ram Panjwani, H.S. Parihar and 1. N. Shroff for Respond-         ent. No. 1.             Niren  De,  Attorney General, Rameshwar  Nath  and  Y.B.         Desai, for Respondent No. 6.         The Judgnent of the Court was delivered by             RAY,  C.J.--This  appeal is by special  leave  from  the         judgment  dated  16  September, 1976 of the  High  Court  of         Madhya Pradesh.         87             The appellant made an application under Articles 226 and         227 of the Constitution in the High Court and impeached  the         order  dated 21 September 1974 whereby the  Government  dis-         missed  the  appellant’s objections against Scheme  No.  9-M         relating  to Road Transport Nationalisation.  The  appellant         also impeached the Scheme as published in the Gazette on  11         October, 1974.             The High Court held that in view of the fact that  Chap-         ter  IV-A of the Motor Vehicles Act, 1939  (hereinafter  re-         ferred to as the Act) is included as Entry 125 in the  Ninth         Schedule  to the Constitution the appellant could not  chal-         lenge the Scheme.             The High Court erred in holding that it was not open  to         the appellant to challenge the Scheme.  The Attorney General         rightly and fairly said that the judgment of the High  Court         could not be supported on that ground.             The High Court failed to appreciate that though  Chapter         IV-A of the Act is not open to any constitutional  challenge         it  is open to any aggrieved person to challenge any  Scheme         on  the ground that it is not a valid Scheme as required  by         the provisions of Chapter IV-A of the Act.             Scheme No. 9-M relating principally  to   Jabalpur-Sagar         and Damoh-Hatta routes was published by the State  Transport         Undertaking in the State Gazette on 15 November, 1963.   The         Scheme  was  approved  and finally published  in  the  State         Gazette  on 12 February 1965.  Under the Scheme  which  came         into  force with  effect from 2 April,  1965  Jabalpur-Sagar         and  Damoh-Hatta  portions of the routes were  reserved  for         exclusive operation by the State Transport Undertaking.  The         portions  Sagar-Bhopal,  Rehli-Garhakota,  Hatta-Panna,  Ka-         tangi-Majhouli  and Damoh-Chhatarpur via Hirapur  were  kept         for  joint operation with existing permit holders  with  the         condition that the permit holders with existing permits were         not  to  pick up passengers from and to  any  station  lying         between Nohta-Abhana Garhakota or any other two stations  on         Jabalpur-Sagar road  and Damoh-Hatta and vice-versa.              The Transport Authorities granted fresh permits  cover-         ing Abhana Garhakota portion treating it to be a portion  of         joint operation  with others.  This action of the  Transport         Authorities was found to  be destructive of the true  inten-         tion of Scheme No. 9-M.             It thus became necessary to modify Scheme No. 9-M..  The         proposal  was  then  placed before the Board  of  the  State         Transport Undertaking referred to hereinafter as the  Under-         taking by, the  General Manager.  The Board of the Undertak-         ing  considered the matter at its meeting held on 20  August         1973  and passed Resolution No. 8354approving  the  proposal         modifying  Scheme No. 9-M.  The  Board ’Resolution  directed         inclusion  of Sagar-Rehli-Garhakota-Jabalpur  and  Patharia-         Damoh  routes for exclusive operation by the State  Corpora-

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       tion.    The Board directed that the Scheme giving  the  de-         tails  should be placed before the Board for  its  approval.         In   this   background  Scheme No. 9-M  giving  details  was         prepared and the proposal was placed before the Board of the         Undertaking at the meeting held  on         88         29  November, 1973.  The Board of the  Undertaking  approved         the  proposal by Resolution No. 1395 and  authorised  conse-         quential action.              Scheme  No. 9-M was published in the Official   Gazette         on  7 December 1973.   The Scheme was thereafter  considered         by   the Special Secretary to the State Government in  exer-         cise of powers under section 68D of the Act.  Under  section         68D  of the Act persons contemplated in the Act  might  file         objections  and the State Government would  hear  objections         and then approve or modify the Scheme. The State  Government         on 21 September 1974 approved the Scheme after having  heard         the  objections.   The approved Scheme was notified  in  the         State Gazette dated 11 October 1974.  The  approved   Scheme         came into force with effect from 19 November, 1974.              Scheme  No. 9-M as approved, after hearing  objections,         provided  in clause (2) that the State Road Transport  Serv-         ices would be provided on the routes of Jabalpur, Sagar  and         Bhopal regions.   In clause (2) of the Scheme 25 routes  are         set out.  Route No. 2 is  Jabalpur Bhopal via Patan, Tenduk-         heda,  Damoh,  Rehli,  Sagar  and  Raisen. Route  No.  3  is         Jabalpur-Sagar via Katangi and Damoh. Route No. 4 is  Jabal-         pur-Sagar via Patan, Tendukheda, Damoh and Rehli, Route  No.         20 is Sagar-Patharia.              In  clause  (4) of Scheme No. 9-M it is  said  that  no         person  other  than the Undertaking will   be  permitted  to         provide  Roard Transport Services on the routes or  portions         thereof specified in clause (2) except as provided in clause         (5).          In clause (5) it is stated that all Road transport Services         will  subject  to  the provisions  made  in  the  subsequent         clauses,  namely,  No.  (6)  and  (7)  be  provided  by  the         Undertaking exclusively on JabalpurSagar via Katangi,  Damoh         and  Damoh-Hatta via Bangnon roads covering portions of  the         routes specified in clause (2).  The routes which the Under-         taking  will  operate  in conjunction with  others  are  (1)         Jabalpur-patan-Tendukheda-Abhana,  (2)   Damoh-Patera-Hatta-         Panna,  (3) Damoh-Hirapur-Tikamgarh and  (4)  Damoh-Hirapur-         Chhatarpur portions of the routes specified in clause (2).               In  clause  (7)  of the Scheme is set out  a  list  of         permits  granted by the Regional Transport  Authorities  and         modified as indicated therein. In Item No. 20 of the list is         set out the name of United. Transport and in Items 22 and 23         is  set  out the name of S.S.M. Trading   Company,  Society.         The  route of Damoh-jabalpur via Abhana, Patan which was  in         the name of United Transport Company was modified to  remain         operative  on the route of Abhana-Jabalpur  via  Tendukheda,         Patan.  The route of Sagar-Jabalpur via  Reihli,  Gerhakota,         Abhana, Tejgarh, Patan which had been given to S.S.M.  Trad-         ing Company was modified to Abhana-Jabalpur via  Tendukheda,         Patna.              It, therefore, appears from the Scheme that the  routes         (1) Jabalpur-Patan-  Tendukheda-Abhana,   (2)  Damoh-Patera-         Hatta-Panna,  (3)   Damoh-Hirapur-Tikamgarh,   (4)    Damoh-         Hirapur-Chhattarpur  were to be operated by the  Undertaking         in conjunction with existing permit holders.          89             The  appellant  under section 68D of the  Act  preferred         objections  to  the  Scheme.  The objections  were  four  in         number.   First  the Scheme is mala fide as it  is  intended

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       "to  avert  (sic)  issuance of permits on  these  routes  to         private operators".  Second the Scheme  is published without         the undertaking forming the requisite opinion under  section         68C  of the Act.  Third the Scheme is discriminatory.    Two         permits of the appellant are proposed to be curtailed where-         as 14 permits on Sagar-Rehli-Garhakota route have been  left         over.  Fourth the Scheme does not fulfil the four-fold tests         in section 68C of the Act.             The  Government heard the objections.  The State  Secre-         tary  rejected the objections and approved the Scheme on  21         September  1974. The State Secretary held that no mala  fide         was  proved.  He also rightly held that  nationalisation  of         Road  Transport Service would result in the legal effect  of         stoppage of issue of permits on the routes mentioned in  the         Scheme.  In short, nationalisation of routes cannot be  said         to be mala fide.  The State Secertary found that the  under-         taking considered the Scheme and formed the requisite  opin-         ion under Section 68C of the Act.  The State Secretary found         that  there  was  no  discrimination. There was  nothing  to         prove  that similarly situated operators  were treated  dif-         ferently.   There was no proof that the undertaking knew  of         the  existence of the alleged permit of the appellant or  of         others. The State Secretary also found that the operators on         Sagar-Garhakota-Patharia route were operating because it was         not  taken  for exclusive operation.  In  other  words,  the         Scheme does not concern the route  on which the 14 operators         are  alleged t0 be plying.  The State Secretary  also  found         that  the four purposes in section 68C of the Act were  ful-         filled.             The  appellant  repeated some of the objections  to  the         Scheme raised before the State Secretary and added new ones.         The  appellant’s contentions here were these.  First  Scheme         No.  9-M which was finalised was not the opinion  formed  by         the undertaking.  Second the appellant asked for  resolution         of  the undertaking dated 20 August 1973  and this  was  not         given.  Therefore, no opportunity was given to the appellant         to  raise objections under section 68D of the  Act.   Third,         Scheme No 9-M does not fulfil the four-fold purposes,  name-         ly,  providing (a) efficient, (b) adequate,  (c)  economical         and  (d)  properly  coordinated road  transport  service  as         mentioned  in section 68C of the Act. Fourth curtailment  of         route Sagar-Rehli-Garhakota is contrary to clause (5) of the         Scheme.             Chapter IV-A of the Act contains sections 68-A to  68-I.         These  provisions  in Chapter IV--A are  under  the  heading         "Special  provisions relating to State  Transport  Undertak-         ings".             The  Scheme  recites  that the  Undertaking  formed  the         opinion that for purposes of providing efficient,  adequate,         economical  and properly coordinated road transport  service         provided  in clause (2)  of the Scheme, it is  necessary  in         the  public  interest  that the road  transport  service  in         relation  to the said routes should be run and  operated  by         the  Undertaking  in accordance with the Scheme.   There  is         thus in-         90         trinsic evidence inherent in the Scheme that the Undertaking         formed  the  opinion for the Scheme.   The  State  Secretary         rightly  rejected the contention of the appellant which  was         repeated here.             It  appears  from the order of the State  Secretary  who         heard   the objections of the appellant against  the  Scheme         that the Secretary never made an order directing the  Under-         taking  to produce  the  resolution dated 20  August,  1973.         In  the  writ petition filed by the appellant  in  the  High

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       Court  the appellant stated in paragraph 19 that the   State         Secretary  instead of directing the Undertaking  to  produce         these  documents  only observed that the  Undertaking  might         think over the request adding that he might himself call for         the  said documents, if thought necessary.  It also  appears         from  the  judgment of the High Court that  the  proceedings         before  the State Secretary indicated that  the  appellant’s         case was argued without any insistence on the. production of         the resolution.  The High Court also noticed that the  State         Secretary made no such direction.  The fact that he made  no         such  direction shows that he found it possible to give  the         decision  without production of it.   The contention of  the         appellant is without any merit.             The  State  Secretary rightly held  that  the  four-fold         purposes  indicated  in section 68C of the  Act  are  estab-         lished.   This  Court in  Capital  Multipurpose  Cooperative         Society  Bhopal & Ors. v. The State of M.P. &  Ors(1),  said         that the right of a person to object to the Scheme is to  be         confined  only to the four grounds, namely, that the  Scheme         did not provide (a) efficient, (b) adequate, (c)  economical         and (d) properly coordinated transport services.  The Scheme         in  the present case amply establishes that it  fulfils  the         four purposes mentioned in the Act.             It  has to be’ remembered that the Scheme in clause  (2)         as well as in clause (5) mentions the exclusive operation of         the  Undertaking on these routes in the public interest.   A         mere allegation that the Scheme does not fulfil the purposes         does not amount to any allegation and far less any proof.             The  appellant laid emphasis on the contention that  the         appellant’s  permits in respect of the portion Garhakota  to         Sagar via Rehli ought not to have been curtailed because the         route was not reserved  for exclusive operation by the State         Transport  Undertaking under clause (5).  It is a matter  of         policy as to what routes should be curtailed for the  opera-         tion  of the Scheme.  Courts do not judge such policy  deci-         sions.   The   appellant’s permits on  the  Garhakota-Rehli-         Sagar  routes  expired on 26 and 30  September,  1976.   The         appellant  has  been granted fresh temporary permit  on  the         route which is of conjoint operation.  This temporary permit         was  granted to the appellant on  25 September,  1976.   The         appellant has taken advantage of it.             It has to be shown that unless the appellant is  allowed         to  operate on Sagar-Rehli-Garhakota route the  Scheme  will         not be efficient, adequate, economical and properly  coordi-         nated.   The appellant did not allege and  substantiate  the         case.   This case cannot be entertained also for the  reason         that it is idle to suggest that the appellant will have  not         only  Abhana-Jabalpur  via Tendukheda Patan route  but  also         SagarRehli-Garhakota route as of right.         ------------------------         (1) [1967] 3 S.C.R. 329.         91             It  is not only competent but also conscionable  that  a         Scheme for nationalisation can be complete or partial.   The         efficiency as well as adequacy of the Scheme is advanced  by         such policy decisions of complete or partial nationalization         of  routes.   See H.C. Narayanappa & Ors, v.  The  State  of         Mysore  &  Ors. C)  Under section 68D of  the Act  the  only         scope  for objection is whether the Scheme is efficient  and         adequate  and not whether exclusion is complete or  partial.         Objections  axe confined only to the four grounds  of  effi-         ciency,  adequacy, economy and proper coordination  of  road         transport service.  Exclusion can be attacked only on  these         four  grounds.  There was never any objection to the  Scheme         on  exclusion related to any of these grounds.    The  State

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       Secretary  in his order, on hearing the objections,  rightly         said that the Sagar-Rehli-Garhakota-Patharia route is not to         be taken for exclusive operation because there is no mention         at all of the route.   The Scheme in clause (5) has specifi-         cally mentioned which routes  are for operation by the State         Transport  Undertaking  in  conjunction  with  others.   The         exclusion of the appellant from route on which the appellant         had earlier operated cannot be said to challenge efficiency,         adequacy, economy or proper coordination.             For  these reasons the appeal is dismissed.  In view  of         the order of the High Court as to costs parties will pay and         bear their own costs.         M.R.                                            Appeal  dis-         missed.         (1) [1960] 3 S.C.R. 742.         92