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PETITIONER: SRI SATYA NARAIN SINGH

       Vs.

RESPONDENT: DISTRICT ENGINEER, P.W.D. AND ANOTHER

DATE OF JUDGMENT: 08/02/1962

BENCH: MUDHOLKAR, J.R. BENCH: MUDHOLKAR, J.R. SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C.

CITATION:  1962 AIR 1161            1962 SCR  Supl. (3) 105  CITATOR INFO :  F          1963 SC 812  (8,13)  R          1963 SC 996  (5)  R          1963 SC1681  (13)  D          1965 SC 311  (2,6)  D          1965 SC1740  (7)  R          1968 SC1053  (5)  D          1969 SC 903  (23)  R          1971 SC 156  (11)  RF         1973 SC1461  (1219)  R          1985 SC1416  (50,168)  R          1987 SC 748  (16)  RF         1990 SC1927  (61)  RF         1991 SC 101  (263)  RF         1992 SC1256  (14)

ACT: Public ferry--Toll-Right to collect from Government  Roadway Buses-Commercial   undertaking  by  Government,  if   public service-.Notification  No 252/IX-209/ (10) dated  March  16, 1925-Northern India Ferries Act, 1878 (XVII of 1878) s.15.

HEADNOTE: The  appellant being the highest bidder at a public  auction got  the right to collect the toll in respect of  ferry  for crossing  the  river of Piprighat for the  year  1954.   The practice upto 1954 was to allow the licensee to collect  the toll from every stage carriage bus.  Till March of the  year 1954  only privately owned stage carriage buses used to  ply on  the route.  Thereafter the route was taken over  by  the Roadways  department  of the State of  Uttar  Pradesh.   The applicant was informed inter alia that no toll was  leviable on  the Roadways Vehicles and was asked to pay  the  monthly installments of the license fee without making any deduction therefore  consequent  upon the exemption  of  the  Roadways buses from tolls. The point for consideration inter alia  is whether the 106 appellant  was  bound to allow the state carriage  buses  of U.P.  Government  to  cross  the  river  by  ferry   without

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collecting any toll. Held, that the notification No. 252/IX-209/(10) dated  March 16, 1925 exempts a vehicle crossing the river on ’public  or district  board  service’,  and it could not  be  said  that plying motor buses by way of commercial activity is  running it  on  a  public service.  The  vehicles  of  the  Roadways department of the Government of Uttar Pradesh crossing  over ferries  cannot be regarded as crossing on  public  service. It  may be that plying stage carriage buses even though  for hire is an activity undertaken by the Government for  ensur- ing  the  people  a  cheap, regular  and  reliable  mode  of transport and is in that sense beneficial to the public, but it  does not cease to be a commercial activity if it is  run with  profit motive.  The vehicles of the Roadways  crossing the river cannot be exempted under the Notification of March 15,1925. Held, further that activities undertaken in the exercise  of the  sovereign  power  of  the  state  or  of   Governmental functions are undoubtedly to be regarded as public  services but a pure business undertaking though run by the Government cannot be classified as public service.  An activity however beneficial   to  the  people  and  however   useful   cannot reasonably  be regarded as public service and cease to be  a commercial  undertaking  if  it is of a type  which  may  be carried  on  by  private individuals and is  carried  on  by Government with a distinct profit motive.  By reason of  the fact  that a commercial undertaking is owned and run by  the State, it does not ipso facto become a "public service".

JUDGMENT: CIVIL APPELLATE JURISDICTION: C. A. No. 435 of 1958. Appeal from the judgment and order dated September 20,  1956 of  the  Allahabad High Court in special Appeal No.  243  of 1955. Naunit Lal for the appellant. G.N. Dikshit and C. P. Lal for the Respondent. 1962.   February 8. The following Judgment of the Court  was delivered by MUDHOLKAR,  J.-This  is an appeal by  certificate  from  the judgment of the High Court of 107 Allahabad  reversing the decision of a single Judge of  that Court directing the issue of a writ of Mandamus against  the respondents under Art. 226 of the Constitution.  The  points which arise for consideration in the appeal are whether  the appellant who was at the relevant time the lessee of a right to  collect tolls from persons, vehicles etc., crossing  the river  by  public ferry at Pipraghat,  District  Ballia  was bound  to  allow  State  carriage  buses  belonging  to  the Government of Uttar Pradesh to cross the river by the  ferry without  collecting  any  toll  or  was  entitled  to  claim abatement  of rent from the Government under the proviso  to s.15  of  the  Northern India Ferries  Act  1878  (hereafter referred to as the Act). In  order  to appreciate the points a few facts need  to  be stated.  There is a ferry at the village Pipragbat, district Ballia for crossing the river and the right to collect tolls in respect of that ferry is put to public auction  annually. The highest bidder at the auction gets the right.  The  rent or licence fee is collected from him in monthly installments during  the  year  with  respect  to  which  the  right  was purchased  by the licensee.  The appellant was  the  highest bidder for the year 1954 and the licence fee payable by  him

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was Rs. 31,751/-.  The practice right upto 1954 was to allow the  lessee to collect a toll of Rs. 5-1-0 from every  stage carriage  bus.   Till March 9 of that  year  only  privately owned stage carriage buses used to ply on the route in which the ferry crossing was comprised.  Thereafter the route  has been  taken over by the Roadways Department of the State  of Uttar  Pradesh.   From March 9 to March  16,  the  appellant realised  tolls  at  Rs. 5.1-0 from  the  State-owned  stage carriage buses when he was informed by a letter by the first respondent  that he should allow the Roadways buses  to  use the  ferry for crossing and recrossing the river  on  credit till  March 31, 1954 and should thereafter submit his bill with 108 respect  to  the  tolls to the Roadways  Department  of  the Government He was also informed that further orders will  be issued on April 1, 1954.  The appellant accordingly  allowed the  Roadways  buses  to  use the  ferry  for  crossing  and recrossing the river and submitted his bill to the  Roadways Department  on March 31, 1954.  That bill was, however,  not paid. On  April  1,  1954  he  received  two  communications  from respondent  no.  1 by one of which hi) was informed that  no toll is leviable on the Roadways vehicles and by another  he was asked to pay the monthly installment of the licence  fee without  making any deduction therefore consequent upon  the exemption of the Roadways buses from tolls. The  appellant had moved the High Court  of  Allahabad.under Art.  226  of  the  Constitution for the  issue  of  a  writ directing  the  respondent "to refrain from  precluding  the petitioner from charging tolls from the Roadways buses",  to issue  a writ commanding the respondents to allow  abatement to  the appellant and to issue an interim direction  to  the respondents asking them to refrain from realising the unpaid monthly  installments of the licence fees till the  decision was given.  Before the petition was decided the  appellant’s licence  had  run  out and, therefore, at  the  hearing  the appellant   confined  himself  to  one  relief,   that   is, commanding  the respondents to allow rebate one  account  of the  exemption of the Roadways buses from liability  to  pay the tolls.  The petition was, however, not amended.  We  may incidentally  mention  that  apart from  the  reliefs  above referred to, the appellant claimed two more reliefs, one  of which was to pass any such other and further order as may be deemed fit and proper. The  learned single Judge of the High Court who decided  the petition in the first instance came 109 to  the  conclusion  that  the  appellant  was  entitled  to abatement of rent under the third paragraph of a. 15 of  the Act  and  directed the issue of a writ  to  the  respondents directing them to "’perform their statutory duty relating to abatement  of rent" payable by the appellant  consequent  on the exemption of Roadways buses from payment of tolls  under the  aforesaid  provision  before  claiming  or   recovering arrears  of  rent from him.  The  respondents  preferred  an appeal  under  the  Letters  Patent which  was  heard  by  a Division  Bench  of the Allahabad High Court.   The  learned Judges held that a licensee is not entitled to abatement  of rent unless the Government makes a declaration under s.15 of the  Act  subsequent  to the grant of licence  to  him.   It pointed out that the G.O. No. 1946/17-,51 dated December 11, 1951  upon which reliance was placed by the  learned  single Judge  being  prior in point of time to the grant of   the licence  to collect tolls to the appellant, did not  entitle

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him  to  claim  abatement.   It,  however,  held  that   the appellant  may  be entitled to claim abatement  of  rent  or licence  fee  under the general law but that such  a  relief could  be  claimed only in a suit but not  in  a  proceeding under  Art. 226 of the Constitution.  They thus allowed  the appeal and dismissed the petition. Section 15 of the Northern India Ferries Act, 1878 runs thus :               "Toll.,  according to such rates as  are  from               time  to time fixed by the  State  Government,               shall be levied on all persons, animals, vehi-               cles and other things crossing any river by  a               public  ferry and not employed or  transmitted               on the public service:               Provided  that the State Government  may  from               time  to-  time,  declare  that  any  persons,               animals,  vehicles  or other things  shall  be               exempt from payment of such tolls.               110               Where the tolls of a ferry have been let under               section 8, any such declaration, if made after               the  date  of  the lease,  shall  entitle  the               lessee  to such abatement of the rent  payable               in respect of the tolls as may be fixed by the               Commissioner  of  the division or  such  other               officer as the State Government may, from time               to  time,  appoint in this behalf by  Dame  or               virtue of his office." The proviso to the section confers upon the State Government power  to declare from time to time any , persons,  animals, vehicles  etc., exempt from payment of such  tolls.   Before the  question of allowing abatement of rent or  licence  fee can  arise  it must first be established that  there  was  a valid exemption with respect to any vehicles etc., under  s. 15  of the Act.  The section also provides that  where  such declaration  is made subsequent to the grant of  licence  to collect  tolls  under  s.  8 the  licensee  is  entitled  to abatement of rent: The Government order to which reference has been made in the two judgments of the High Court runs as follows:                "Subject: Exemption from payment of toll.               I  am desired to say that a question has  been               raised  whether  the Roadways  Motor  Vehicles               should  be exempt from payment of ferry  tolls               while  crossing any river by a  public  ferry.               Government have given their full consideration               to this matter and have come to the conclusion               that  the motor vehicles run by  the  Roadways               with  the operational staff accompanying  them               on duty fall under the exemption granted  from               payment  of ferry toll in paragraphs  2(a)  of               notification no. 252/-IX-209/(10) dated  March               16, 1925               111               (published on page 347 of the District,  Board               Manual).               2.lam, however, to observe that the passengers               traveling  in these vehicles with their  goods               and  all the private goods, being  transported               in the Roadways trucks shall be liable to  the               payment  of tolls as heretofore  according  to               the rates fixed by the Local Government.               3.The District Magistrate, District Board  and               ferry contractors in your division may  please               be informed accordingly."

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It may be pointed out that this order, if what appears to be merely a communication addressed to certain authorities  can be  regarded as a Government order, does not, itself  confer any  exemption  with respect to the buses run by the  U.  P. Roadways  but  sets out the opinion of the  Government  that such  buses  must  be regarded as  being  exempted  under  a notification of March 16, 1925 issued under "s.   15 of  the Act.  That notification reads thus:               "2.  The  following shall be exempt  from  the               payment of tolls:               (a)All  persons animals and vehicles  crossing               any  river by a public ferry when employed  or               transmitted  on the public or  District  Board               service." Admittedly  at  that date the State was no running  any  bus services  in  the United Provinces (now the State  of  Uttar Pradesh).   May be there were no Government-owned  buses  at all  in any other province of India at that time.   Moreover it would not be reasonable to assume that a State enterprise of  this kind was even in the contemplation of. the LT.   P, Government  at that time.  At that time, apart from  running some  railways  the  State had not  entered  the  commercial field.  It is in the light of these facts that the  language of the notification of March 16, 1925, must be interpreted. 112 What  the  notification exempts is a  vehicle  crossing  the river  on ’public or district board service’.  Could  it  be said  that plying motor buses by way of commercial  activity is  running it on a public service?  It is  undoubtedly  not easy  to define what is "public service" and  each  activity has  to be considered by itself for deciding whether  it  is carried  on as a public service or not.  Certain  activities will  undoubtedly  be regarded as public  services,  as  for instance, those undertaken in the exercise of the  sovereign power  of  the State or of  governmental  functions.   About these  there  can be no doubt.  Similarly  a  pure  business undertaking   though  run  by  the  Government   cannot   be classified  as  public  service.   But  where  a  particular activity  concerns  a public utility a  question  may  arise whether  it falls in the first or the second category.   The mere  fact that  activity may be useful to the public  would not  necessarily  render  it public  service.   An  activity however beneficial to the people and however useful  cannot, in our opinion, be reasonably regarded as public service  if it  is  of a type which may be carried on by  private  indi- viduals  and  is carried on by government  with  a  distinct profit  motive.  It may be that plying stage carriage  buses even  though  for  hire is an  activity  undertaken  by  the Government  for  ensuring the people a  cheap,  regular  and reliable  mode of transport and is in that sense  beneficial to  the  public.  It does not, however, cease to be  a  com- mercial  activity if it is run with profit  motive.   Indeed even  private operators in order to attract custom are  also interested in providing the same facilities to the public as the  Government undertaking provides.  Since that is so,  it is  difficult  to see what difference there is  between  the activity carried on by private individuals and that  carried on  by Government.  By reason of the fact that a  commercial undertaking is owned and run by the State  113 it does not ipso facto become a ’public service’.  It is not disputed  before  us  that the Roadways  department  of  the Government  of  U.  P.  is running a  profit  making  and  a profitable activity by excluding every kind of  competition. In  the circumstances, therefore, we find it  impossible  to

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hold that its vehicles crossing over ferries can be regarded as  crossing  on public service.  They are,  therefore,  not entitled  to any exemption under the notification  of  March 15, 192 5. Since they are not entitled to any exemption  the question of abatement of rent does not arise. It is true that the petitioner, as already stated,  confined himself  at the stage of arguments in the High Court to  the relief  of  abatement, because of  change  of  circumstances which  took place between the date of filing  his  petition and  its  hearing.   He did so evidently  upon  a  misunder- standing  of the legal position with regard to the scope  of the notification of March 16. 1925.  However, the  appellant has  raised ,in alternative contention in his  Statement  of the  case to the effect that the Roadways buses which  carry passengers  are  used by the Government for  carrying  on  a commercial undertaking and that; there fore they do not come within  the exemption made by the notification of  the  year 1925.   In  view of this and of the fact that  the  petition which contains a prayer for grant of ,other relief’ has  not been  amended  and is thus in its original form  we  see  no difficulty in granting appropriate relief to the appellant. In the result we allow the appeal and set aside the judgment of the Division Bench as well as of the single judge of  the High Court of Allahabad and direct that a writ in the nature of mandamus shall issue to the respondents directing them to pay to the appellant full tolls with respect to every 114 crossing of the, Roadways buses over the ferry between March 16, 1954, and the date on which the licence in favour of the appellant expired. The  costs of the appellant here and in the High Court  will be borne by the respondents. Appeal allowed.