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PETITIONER: T. GOVINDARAJA MUDALIAR ETC. ETC.

       Vs.

RESPONDENT: THE STATE OF TAMIL NADU & OTHERS

DATE OF JUDGMENT09/01/1973

BENCH: GROVER, A.N. BENCH: GROVER, A.N. MUKHERJEA, B.K.

CITATION:  1973 AIR  974            1973 SCR  (3) 222  1973 SCC  (1) 336  CITATOR INFO :  RF         1988 SC 501  (5)  R          1988 SC1353  (18)  R          1989 SC2105  (6)  RF         1990 SC1277  (5)

ACT: Constitution  of India, Article 19(1)(f)-Motor  Vehicle  Act 1939, Madras Amendment Act 18 of 1939-Chapter  IVA-Sections 47(1)(cc),  58(2)(a), Section 68(cc)-Rules of  Business-Rule 23(A)-Scheme  for nationalisation of State Carriage  whether violative of Article 19 (1) (f). Constructive  res  judicata-The  same  scheme  unsuccesfully challenged for violation of Art. 19 (1) (g) earlier.

HEADNOTE: The Scheme for nationalisation of the Stage Carriage  issued under  Chapter IVA of the Act was challenged before  Supreme Court  on  the  ground  of the  alleged  violation  of  Art. 19.(1)(g)  of  the Constitution. The Supreme Court  by  its judgement in A. Samjeevi Naidu etc.  V. State of Madras  and another  (1970  3  S.C.R. 505) turned  down  the  challenge. After  the decision of the Supreme Court in Rustom  Cavasjee Cooper  v.  Union  of India (1970 3 S.C.R.  530),  the  said scheme was again challenged as violative of Art. 19 (1)  (f) of the Constitution.  The Scheme was challenged inter  alia, on  the  ground,  that  the  permit  issued  under  the  Act constitutes  property, and the right to apply for permit  as ’well  as renewal of a permit is a right to hold  property and  that the law authorising the nationalisation  of  Stage Carriage  was violative of Art. 19(1)(f) as the  restriction was  not  in the public interest.  The writ  petitions  were dismissed  by  the  Madras High  Court.   In  rejecting  the appeals. HELD  :  (i) That there is no merit in the argument  of  the appellants that before the decision of the Supreme Court in Rustom  Cavasjee Cooper’s Case, it was not possible for  the appellants  to challenge the validity of Chapter IVA of  the Act,  as the earlier decisions were based on an theory  that Art. 19 (1) (f) could not be invoked when a case fell within Art.  31  of the Constitution K. K. Kochuni and  Others V. State of Madras (1963) 3 S.C.R. 887), had earlier laid  down that clause 1 of Art. 31 could no longer be construed as  to

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exclude  the  operation of Art. 19 and a law  regarding  the deprivation of property was, therefore, too late in the  day to pursue that line of argument. [229 D] (ii) By  Virtue of the Scheme, the existing permits  of  any operator  will not be cancelled.  None of the properties  or assets  of the appellants is going to be acquired.   It  has already  been  held that no operator can  claim  renewal  of permit as a matter of right.  The effect of  nationalisation on  the  properties or the business of the operator  is  not such  as cannot be regarded to a reasonable  restriction  in the  interest of general public within the meaning  of  Art. 19(5).   The  tests regarding the validity  of  Act  falling under  Clause 5 or Clause 6 of Article 19 are same,  Akadshi Padhan  v.  State  of Orissa (1963)  Supp.  2  S.C.R..  691) followed. [232 H] (iii)     Held,  the  hearing of objections  to  the  Scheme under  s. 68 (b) of the Act by the Home Secretary  does  not violate rules of natural justice nor can any bias be imputed simply because Home Secretary is also 223 the  member of a committee which made the  report  regarding the  Schemes of nationalisation.  Dosa Satyanarayana  Murthy v. The Andhra Pradesh State Road Transport Corporation (1961 S. C. R. 642)  followed. [233 G] (iv) Held further, that the nationalisation Scheme, even  if introduced  piece-meal on particular routes, is not  illegal unless  it  is  established  that  there  is  discrimination against some operators. Dosa Satyanarayana Murthy’s case followed. The  mere  fact  that the Scheme was approved  by  the  Home Secretary  without any modification does not mean  that  the discretion,  in  discharge of  the  quasi-judicial  function under s. 68(b) was not properly exercised or that there  was no  scope for the proper exercise of the discretion  due  to the mandatory language contained in Govt.  Orders. [235 E] Saghir  Ahmed v. State of U.P. & Ors., [1955] 1 S.C.R.  707, Ram  Chandra Palai and Others v. The State of Orissa &  Ors. [1956]  S.C.R. 29, Bhikaji Narain Dhakras and Others v.  The State  of  Madhya Pradesh and Others, [1955] 2  S.C.R.  589, Gullapalli Nageswara Rao and Others v. Andhra Pradesh  State Transport  Corporation  and another [1959] Supp.   1  S.C.R. 319, Smt.  Sitabati Debi and another v. State of West Bengal and  another,  [1967]  2 S.C.R. 949,  Mohd.   Ayub  Khan  v. Commissioner of Police, Madras and another, [1965] 2  S.C.R. 884  Smt.   Somavanti and Others.  The State of  Punjab  and Others  [1963] 2 S.C.R. 774, Municipal  Committee,  Amritsar and  another v. State of Punjab and Others [1969]  3  S.C.R. 447 referred to. East  India  Electric Supply & Traction Co. Ltd.  v.  S.  C. Dutta Gupta and Others, 59 C.W.N. 162, held not applicable. Srinivasa Reddy and Others v. The State of Mysore and Others [1969] 2 S.C.R. 130, explained.

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals  Nos.  672702, 704-710,  722-728, 776-781 of 1972 & 1057-1062, 1120,  1125, 1200, 1224, 1298-1300 & 2301 of 1972. Appeals  by  certificate from the Judgment and  Order  dated February 3, 1972 of the Madras High Court in Writ  Petitions Nos.  883, 884, 885, 886, 942, 992, 993, 994, 995  of  1966, 2061, 2649, 3825 of 1970. A.   K.  Sen.  K. Jayaram, for the appellants, in  C.A.  No. 672.

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K.   Jayaram for the appellants in C.As. Nos. 673-676, 683, 684,  687, 688, 693, 678, 681, 682, 685, 686, 689-698,  694- 695, 776-781, 1298-1300 & 2301. M.   Natesan,  K.  Jayaram, for the appellants in  C.A.  No. 677. K.   K.  Venugopal  and Vineet Kumar for the  appellants  in C.A. Nos. 697-702. 224 E.   C.  Aggarwala, and A. T. M. Sampath for the  appellants in C.As. Nos. 704.710. K.K.  Venugopal  and K. B. Nambiyar, for the  appellants  in C.As. Nos. 722-728, 1057.1062 & 1200. K.   K.  Venugopal and A. S. Nambiyar for the appellants  in C.As. Nos. 1120.1125. Vineet Kumar for the appellant in C.A. No. 1224. S.   Govind  Swaiminadhan,  S. Mohan, A. V.  Aangam  and  A. Subhashini  for the Respondents in C.As. Nos.  672-676,  678 for Respondents Nos. 1, 3 & 4 (In C.As. Nos. 677, 679,  680, 697, 702. 704-710, 722-728 and 776-781. S.   Gobind  Swaminadhan, A. V. Rangam, N. S. Sivam  and  A. Subhashini  for  the respondents in C.As. Nos.  1057,  1062, 11201125, 1200 and 2301 and all the respondents in C.A. Nos. 1224 and 1298-1300. The Judgment of the Court was delivered by- GROVER.  J.   These appeals by certificate arise  out  of  a common  judgment of the Madras High Court given in a  number of writ petitions filed before it by various stage  carriage operators. The facts have been set out in detail in the judgment of the High  Court and need be stated only briefly.  The policy  of nationalisation  of passenger bus Transport in the State  of Madras  (now  Tamil Nadu) was laid down  by  the  Government Order dated June 7. 1967.  Under that order all routes of 75 miles  and  above, all routes radiating  or  terminating  in Madras  City and all routes in the Kanvakungi District  were to  be nationalised as and when the permits of  the  private operators  expired.  By the Government order dated June  17, 1967  a  committee  was constituted  for  implementing  the, above,  decision.   A  Draft  scheme  was  prepared  by  the committee  for nationalising the routes in question  to  the complete elimination of private operators.  This scheme  was published  under  s.  68-C of the Motor  Vehicle  Act  1939, hereinafter  called the ’Act’.  A number of  writ  petitions were  filed  in  the  High Court  in  1967  challenging  the validity  of the draft scheme.  That scheme was struck  down by  the  High  Court.  Thereafter  the  Governor  of  Madras inserted  Rule 23-A in the Madras Government Business  Rules in  Exercise  of  his  powers under Art.  166  of  the  Con- stitution.   It  was provided thereby that  the  powers  and functions  which  the  State  Transport  Undertaking   could exercise under s. 68C shall be exercised by the Secretary to the  Government  of  Madras in the  Industries,  Labour  and Housing  Department on behalf of the State  Government.   It was also provided by that Rule that the powers and functions of the State Government under s. 68-D of 225 the Act and the Rules relating thereto were to be  exercised by  the  Secretary to the Government of Madras in  the  Home Department on behalf of the State Government.  In April 1968 an Ordinance was promulgated by the Governor which was later replaced  by  the,  Madras  Act  18  of  1968  which  became effective  from April 1, 1968.  By that enactment  s.  47(1) CC, s. 58(2) (A) and s. 68    (CC)  were added to  the  Act. Under   the  first  two  sections  the  Regional   Transport Authority  was to have due regard to the publication of  the

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draft scheme in granting a permit or a renewal of a  permit. The State Transport Undertaking, however, was entitled as of right  to  the  issuance  of  a  temporary  permit  on   the publication of a draft scheme under s. 68(CC).  In  exercise of   the  powers and functions under the new  Business  Rule 23-A   schemes  of  nationalisation  were  promulgated   and published.  A number of operators again filed writ petitions challenging  the  draft scheme as also the validity  of  the Tamil  Nadu  Act  18 of 1968.  The  High  Court  upheld  the validity  of  these  provisions including  the  newly  added sections.   That decision was affirmed by this Court  in  A. Sanjeevi Naidu etc. etc. v. State of Madras & Another. (1) It  was  pointed out in that judgment that in the  State  of Tamil  Nadu the State Transport Undertaking is a  Department of  the State Government.  Therefore the  necessary  opinion had  to be formed by that Government.  It was held that  the function under      the  Act  had  been  allocated  by   the Governor  to the Transport Minister under the Rules and  the Secretary of that Ministry had been validly authorised under rule  23-A to take action under s. 68 (c) of the  Act.   The validity  of  the provisions of the Madras Act  18  of  1968 which  amended the Act had been canvassed before this  Court but it was observed that it was not necessary to  decide that  matter while deciding the question of the validity  of the impugned scheme. As pointed out by the High Court a third attempt was made by way of filing writ petitions in the High Court out of  which the  present appeals have arisen to impugn the  validity  of Chapter  IV   A of the Act as amended by Madras  Act  18  of 1968.   We  shall  first state  the  allegations  which  are relevant for deciding the constitutionality of the  impugned provisions.   In  this  connection  we  may  refer  to  writ petition  No.  780  of  1970  in  which  the  petitioner  V. Krishnamurthy  was  one  of those  who  had  challenged  the validity  of  the draft scheme published  by  the  Director, Madras  State  Trans  port Department as well as  the  draft scheme  published  by  the Secretary to  the  Government  of Madras,  Industries, Labour and Housing Department.  It  was stated in para 7 of the petition that (1)  [1970] 3 S.C.R. 505. 16-631Sup. CI/73 226 by reason of the dismissal of the appeals by this Court  the Secretary  to the Government, Home Department, would now  be competent  to take up the draft scheme for hearing under  S. 68-D  of  the  Act.   On  finalisation  of  the  scheme  the petitioner’s permit would automatically stand cancelled.  In that event the petitioner’s business would have to be closed down  and he would be seriously affected  financially.   The following part of paragraph 7 may be reproduced :               "It  would  be  seen that the  result  of  the               implementation  of  the Chapter IV-A  is  that               only two buses operated by me as a  commercial               undertaking could have been nationalised,  and               the  vehicles covered by the permits would  be               reduced in value to that of scrap and it would               have  no  market at all as there would  be  no               operators  who  would  be  coming  forward  to               purchase  these  vehicles  by  reason  of  the               nationalisation policy of the Government." According to paragraph 8 of the petition Chapter IV-A of the Act is violative of the fundamental rights guaranteed  under Art.  19(1) (f) and (g) of the Constitution for the  reason, inter alia, that the permit issued under the Act constitutes property  and the right to apply for a permit as also to  be

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granted  a renewal of a permit is a right to  hold  property and   the  petitioner  would  be  deprived   thereof.    The petitioner’s right under Art. 19(1)(f) could, therefore,  be taken  away  only by a law relating  to  nationalisation  of stage carriages if such a law satisfied the test of  Article 19(5), namely that it should be a reasonable restriction  in public  interest.  It was stated that public interest  would in  no  way  be  promoted  by  nationalisation  because  the Government   undertaking  wherever  the  routes   had   been nationalised was running into loss.  Another attack was made on  the ground that no procedural safeguards were  contained in the Act before deprivation of the right to property could take  place.  It was further pleaded that although  S.  68-D provided  for  compensation, being paid at the rate  of  Rs. 200/per month of the unexpired portion of each permit  there was  no provision for compensation where as a result of  the approved scheme renewal of the permit was refused. In  the return which was filed on behalf of the  respondents an objection was raised that the writ petition was liable to be dismissed on the ground of constructive res judicata.   A writ  petition had been filed on previous occasion  and  the points now sought to be agitated had not been taken.  It was further maintained that according to the scheme it was  only on the expiry of the existing permits,of operators that  the State  Transport  Undertaking would  commence  its  services under the scheme of nationalisation.  Other allegations made were denied. 227 The High Court first considered the question whether Chapter IV-A  of  the  Act is violative of Art.  19(1)  (f)  of  the Constitution  and  the  same has been  canvassed  before  us strenuously.   The High Court was of the view that  a  route permit  is property and that although the validity  of  That Chapter  had  corn& up for consideration before  this  Court earlier and had been upheld but the decision in those  cases was  confined to the attack under clause (g) of  Article  19 and not clause (f).  Now was it open to challenge before the decision  of  this  Court  in what  is  known  as  the  Bank Nationalisation  case : Rustom Cavasjee Cooper v.  Union  of India.(1)  The  High Court acceded to the  argument  of  the Advocate  General  that a bus with a permit  is  a  valuable property but without a permit or when the permit expires  it ceases  to have more value than what can be fetched  in  the market.   The  motor  vehicle  is  not  taken  away  by  the Government  and the permit holder is free to use it.   Since the  renewal  of a permit is not a matter of  right  on  the expiry of the permit its holder had no property in it and as such  there  was no question of infringement of  his  funda- mental  rights guaranteed by Article 19(1)(f) or Art. 31  of the Constitution. It  is necessary to notice the previous decisions  in  which the  constitutional  validity of the provisions  similar  to those  of the Act was challenged.  In Saghir Ahmed v.  State of  U.P.  &  Others  (2) it was  held  that  the  U.P.  Road Transport  Act 1951 violated fundamental rights  of  private citizens  guaranteed  under  Art.  1 9 (1)  (f  )  of  the Constitution and was not protected by clause (6) of Art.  19 as it stood at the time of the enactment.  A declaration had ’been  made in terms of s. 3 of that Act to the effect  that the   stage  ,carriage  services,  among  others,   on   the Bulandshahr   Delhi   route  shall  be  run   and   operated exclusively  by  the State Government.  A  scheme  was  also notified for the operation of the stage carriage services on those  routes.   This was held to be an infraction  of  Art. 19(1)  (g) of the Constitution.  The new clause inserted  in

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Art. 19(6) by the Constitution First Amendment Act 1951  did not  apply to the facts of this case.  It was observed  that after  the  insertion of that clause no objection  could  be taken  to  the creation of a monopoly by the  State  on  the ground that it violated Art. 19 In the next case Ram Chandra Pilai & Others v. The State  of Orissa  &  Others (3) schemes of  nationalisation  of  stage carriage services were assailed on various grounds including infringement  of  Art. 19(1) (f) and (g).  In  view  of  the amendment  made  in  clause  (6) the  creation  of  a  state monopoly  by  law  was found to be  permissible  under  that clause.  Saghir Ahmads case was held to be inapplicable  and the decision in Bhikaji Narain Dhakras (1) [1970] 3 S.C.R. 530. (3) [1956] S.C.R. 29. (2) [1955] 1 S.C.R. 707. 228 &  Others  v. The State of Madhya Pradesh &  Another(1)  was followed.   It was not considered necessary to  examine  the further  contention that the fundamental  rights  guaranteed under Arts. 19 (1)  (f) and 31(2) had been violated.  If the permits held under the   Act were prematurely terminated  or cancelled compensation was    provided  by  the  Orissa  Act under which the nationalisation had     been done.  If there was no renewal of the permits on their expiration after they had  run for their normal period no claim could be  made  by the pen-nit holders on the score of such nonrenewal  because renewal was not a matter of right.  The concerned  transport authority  would  be well within its right  to  refuse  such renewal  having  regard  to the provisions  of  the  amended sections  47  and 55 of the Act.  If at all  there  was  any deprivation  of proprietary rights it would be by  authority of  law.  in Gullapalli Nageswara Rao &  Others,  v.  Andhra Pradesh State Transport Corporation & Anr. (2 ) the validity of the ’provisions contained in Chapter IV-A of the Act  was directly  assailed.   The Court refused to  draw  inferences from  the  provisions contained in s. 68-G  for  payment  of compensation to the holder of a permit that the  legislature had assumed that a transfer of the business was involved  in the  process laid down in Chapter IV-A.  Article 31  of  the Constitution was held not to having been attracted. Before  the decision in K. K. Kochuni & Others v.  State  of Madras  &  Others(3)  this Court had held in  the  State  of Bombay  v. Bhanji Munji & Another(4) which was  followed  in certain  other cases that the substantive provisions of  law relating  to acquisition of property were not liable  to  be challenged  on  the ground that  they  imposed  unreasonable restrictions on the right to hold property.  In other words, in  cases  falling under Art. 31(2) the provisions  of  Art. 19(1) (g) could not be invoked.  In Kochuni’s case, however, the effect of the Constitution Fourth Amendment Act 1955  on Art.  31 was considered.  It was held that that Article  was no  longer a self-contained Article providing for a  subject different  from that dealt with by Art. 19.  It  dealt  with two  different  subjects.   Clauses  2  and  2A  dealt  with acquisition and requisition and clause 1 with deprivation of property by authority of law.  Clause 1 of Article 31  could no  longer  be so construed as to exclude the  operation  of Article  19.  Bhanji Munji’s case was distinguished  on  the ground  that after the Constitution Fourth Amendment Act  it no longer held the field.  In Smt.  Sitabati Debi & Anr.  v. State  of  West  Bengal & Anr.(5) it was  pointed  out  that Kochuni’s  case was not concerned with a law of  requisition or  acquisition.  Therefore the observations therein had  to be under- (1)  [1955] 2. S.C.R. 589.

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(3)  [1960] 3 S.C.R. 887. (2)  [1959] Supp.  S.C.R. 319. (4)  [1955] 1 S.C.R. 777. (5) [1967] 2 S.C.R. 949. 229 stood as meaning that Bhanji Munji’s case no longer governed a  case  of  deprivation of property  by  means  other  than requisition and acquisition.  In other words any deprivation of property under Art. 3 1 (1) had to satisfy the  guarantee of  the  fundamental rights including Art.  19(1)  (f).   In Rustom  Cavasjee Cooper’s case however, this  Court  settled the whole position by holding that the limitation prescribed for  ensuring due exercise of the authority of the State  to deprive   a  person  of  his  property  and  the  power   to compulsorily  acquire the property were specific clauses  of limitation  on the right of private property  falling  under Art. 19 (1) (f). Thus the Court came to the conclusion that Arts. 19 (1)  (f) and  31(2) were not mutually exclusive. The argument of  the appellants is that prior to the decision in Rustom  Cavasjee Cooper’s case it was not possible to challenge Chapter  IV-A of  the  Act owing to the decision of this Court  that  Art. 19(1) (f) could not be invoked when a case fell within  Art. 31  and  that  was  the reason why this  Court  in  all  the previous decisions relating to the validity of Chapter  IV-A proceeded  on an examination of the argument  whether  there was  infringement of Art. 19(1) (g), and clause (f) of  that Article  could  not possibly be invoked.  We are  unable  to hold that there is much substance in this argument.   Bhanji Munji  and  other  decisions which followed  it  were  based mainly  on an examination of the inter-relationship  between Article  19(1) (f) and Art. 31(2).  There is no question  of any  acquisition or requisition in Chapter IV-A of the  Act. The  relevant  decision for the purpose of these  cases  was only  the one given in Kochuni’s case after which  no  doubt was  left  that the authority of law seeking  to  deprive  a person of his property otherWise than by way of  acquisition or  requisition was open to challenge on the ground that  it constituted   infringement   of   the   fundamental   rights guaranteed  by Art. 19 (1) (f ). It was, therefore, open  to those  affected  by the provisions of Chapter IV-A  to  have agitated  before  this  Court the question  which  is  being raised now based on the guarantee embodied in Art. 19(1) (f) which was never done.  It is apparently too late in the  day now  to pursue this line of argument, in this connection  we may  refer to the observations of this Court in Mohd.   Ayub Khan v. Commissioner of Police Madras & Another(1) according to  which  even if certain aspects of a  question  were  not brought to the notice of the court it would decline to enter upon-re-examination  of the question since the decision  had been  followed in other cases.  In Smt.  Somavanti &  Others v.  The State of Punjab & Others(2) a contention was  raised that in none of the decisions the argument advanced in  that case  that a law may be protected from an attack under  Art. 31  (2) but it would be still open to challenge  under  Art. 19(1) (f), had (1) [1965] 2 S.C.R. 884. (2) [1963] 2 S.C.R. 774. 230 been examined or considered.  Therefore, the decision of the Court  was  invited  in the light of  that  argument.   This contention,   however,   was  repelled  by   the   following observations at page 794 :-               "The  binding  effect of a decision  does  not               depend upon whether a particular argument  was

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             considered  therein or not, provided that  the               point with reference to which an argument  was               subsequently advanced was, actually decided." It  is common ground in the present cases that the  validity of  Chapter IV-A of the Act has been upheld on all  previous occasions.  Merely because the aspect now presented based on the  guarantee  contained  in  Art. 19  (1  )  (f)  was  not expressly  considered for a decision given thereon will  not take away the binding effect of those decisions on us., The learned Advocate General who appears for the respondents has invited our attention to certain decisions which do  not relate  to  the  provisions  of the Act  but  in  which  the principle  which  is sought to be invoked on behalf  of  the appellants  based  on Art. 19(1)(f) has been  examined.   In Akadshi  Padhan  v.  State of  Orissa(1)  the  question  was whether the monopoly in the trade of Kendu leaves which  the State  of  Orissa took over constituted restriction  on  the fundamental  right  of the petitioner who used to  carry  on extensive  trade  in the sale of Kendu leaves.   The  attack against the Orissa Act by which the monopoly was created was based on the alleged contravention of the fundamental rights under  Art. 19(1)(f) and (g).  The rival  contentions  which were advanced were that the effect of the change made by the Constitution First Amendment Act 1951 in Art. 19(6) was  not to exempt the law passed for creating a State monopoly  from the application of the rule prescribed by the first part  of Art. 19(6).  On the other hand it was contended by the State that  the  object of the amendment was to put  the  monopoly laws  beyond the pale of challenge under Art. 19(1) (f)  and (g).   The  scope  and  effect of  Art.  19  (6)  after  its amendment   was  fully  considered.   The  Court   felt   no difficulty in rejecting the argument that the creation of  a State  monopoly  must  be  justified  by  showing  that  the restrictions  imposed by it were reasonable and were in  the interest of the general public.  It was stated  emphatically that the amendment clearly indicated that the State monopoly in  respect of any trade or business must be presumed to  be reasonable  and in the interest of general public so far  as Art.  19(1) (g) was concerned.  The Court proceeded to  hold that the effect of the amendment made in Art., 19(6) was  to protect  the  law relating to the creation of  monopoly  and that  meant it were only these provisions of that law  which were integrally and essentially connected with the  creation of  the  monopoly  which  were protected  The  rest  of  the provisions which (1) [1963] Supp. 2 S.C.R. 691. 231 might  be incidental did not fall, under the later  part  of Art. 19(6) and would inevitably have to satisfy the test  of the first part of that Article.  The question which is  more relevant  for our purpose was next considered,  namely,  the effect  of  the amendment, on the other  fundamental  rights guaranteed  by  Art. 19(1).  The following  observations  at page 710 on this point may be reproduced :               "The  position,  therefore,  is  that  a   law               creating  a State monopoly in the  narrow  and               limited   sense  to  which  we  have   already               referred  would be valid under the later  part               of  Art. 19(6), and if it indirectly  impinges               on  any  other right, its validity  cannot  be               challenged  on that ground.  If the  said  law               contains other incidental provisions which are               not   essential  and  do  not  constitute   an               integral part of the monopoly created by i.e.,               the validity of those provisions will have  to

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             be tested under the first part of Art.  19(6),               and  if  they directly impinge  on  any  other               fundamental right guaranteed by Art. 19 (1),               the  validity of the said clause will have  to               be  tested by reference to  the  corresponding               clauses of Art. 19.  It is obvious that if the               validity  of  the said provisions  has  to  be               tested  under the first part of Art. 19(6)  as               well as Art. 19(5), the position would be  the               same  because for all practical purposes,  the               tests  prescribed by the said two clauses  are               the same." The instances given in the above decision of the State mono- poly  in respect of road or air transport are pertinent.   A law  relating to such a monopoly would not normally  impinge upon the citizens’ fundamental right under Art. 19 (1)  (f). Similarly  a State monopoly to manufacture steel,  armaments or  transport vehicles or railway engines and coaches  would not normally impinge on Art. 19(1) (f).  If the law creating such monopolies were, however, to make incidental provisions directly  infringing the citizens’ right under Art.  19  (1) (f) that would be a different matter. (see pages 710, 711). In Municipal Committee, Amritsar & Anr. v. State of punjab & Others(1)   the   validity  of  the  Punjab   Cattle   Fairs (Regulation)  Act  1967 came up for  examination.   The  Act declared  that  the State had the monopoly  to  hold  cattle fairs   and   it  prohibited  all  local   authorities   and individuals  from  holding such fairs at any  place  in  the State.   Shah J., delivering the judgment of the Court  said at page 456               "By  imposing restrictions upon the  right  to               hold a fair, the citizens are not deprived  of               their property, and the freedom guaranteed  by               Art. 19 (1 ) (f) is not infring- (1)  [1969] 3 S.C.R. 447. 232               ed. The primary object of the Act is to give a               monopoly  to the State to hold  cattle  fairs.               As  a necessary concomitant of that  monopoly,               holding  of cattle fairs by local  authorities               and    individuals   is    prohibited.     The               prohibition flows directly from the assumption               of monopoly by the State and falls within  the               terms  of Art. 19(6) of the Constitution.   It               is  a provision of the law  creating  monopoly               "basically  and  essentially  necessary"   for               creating  the State monopoly to prevent  other               persons from conducting the same business". The learned Advocate General maintains that it follows  from the above decisions that when nationalisation of a transport service  is made which is fully protected by Art.  19(6)  no question  arises  of  any deprivation of  property.   It  is possible and likely that the value of the buses owned by the operators may be prejudicially affected or that they may not be  able to carry on trade or business on  the  nationalised routes.   According to the clear instance given  in  Akadshi Padhan’s case to which reference has already been made a law relating to such a monopoly would not normally infringe  the citizens’ fundamental right under Art. 19(1) (f). Mr.  Natesan for the appellants has pointed out  that  while promulgating   the  schemes  of  nationalisation   temporary permits have been granted to the State Road Undertaking  and the  compensation which is sought to be paid to  the  permit holders is either nil or too small and there is no provision for  payment  of any compensation the  operators  for  being

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deprived of the transport business or for the effect of  the non-renewal  of  their permits.  While examining  the  above contentions  it  may be stated that there is no  dispute  on certain matters.  The first is that according to the schemes of  nationalisation  which have been impugned  all  existing permits  must come to an end before each scheme will  become enforceable on a particular route.  In other words by virtue of the scheme the existing permits of any operator will  not be  cancelled.   None of the properties. or  assets  of  the appellants  is going to be acquired.  So far as the  renewal of a permit is concerned this Court has already held that no operator  can claim renewal as a matter of  right.   Section 68-G  of  the  Act, contains the  principle  and  method  of determination  of  compensation if any  existing  permit  is cancelled or its terms are modified.  In the present  cases. however.  no  such question arises because no  occasion  for cancellation  of existing permits can arise in view  of  the terms of the impugned scheme.  The effect of nationalisation on  the properties or business of the operators is not  such as cannot be regarded to be a reasonable restriction in  the interest  of  the general public within Art. 19 (5)  in  the same  way  as  a  state monopoly  must  be  presumed  to  be reasonable and in the interest of the general public 233 so far as Art. 19(1)(g) and Art. 19(6) are concerned this is view of the fact that the tests prescribed by clauses 5  and 6  of Art. 19 are the same : (vide Akadshi  Padhan’s  case). We  are  accordingly unable to sustain the  challenge  under Art.  19(1)  (f)  even of such a challenge is  open  to  the appellants in the light of what has been observed earlier. It has next been argued that the nationalisation scheme were vitiated for various reasons.  The first submission is  that a  policy  decision was taken by the  government  which  was embodied  in the Government Order dated June 17,  1967.   It was  stated  therein  that  the  Government  had  considered carefully  the question of extension of  nationalisation  of passengers  transport in the State.  In modification of  the existing policy the Government had decided that the types of routes  set  out  should be  nationalised.   The  Government proceeded  to  direct  that the  routes  in  the  categories mentioned should be nationalised as and when the permits  of the  private operators expired.  On the same day by  another Government  Order  the  Government  constituted  an  ad  hoc committee  "to  work  out the details  in  all  aspects  for implementing  the  policy decision." One of the  members  of that  committee  was the Secretary to the  Government,  Home Department.  The Committee was to submit its report within a fortnight.  After the report had been submitted schemes were published under s. 68-C by the Secretary, Industries, Labour and  Housing  Department,  hereinafter referred  to  as  the Secretary industries.  He purported to do so under rule  23A of  the Rules of business.  Objections which were  fixed  by the  operators were heard and the schemes considered by  the Secretary  Home,  under s. 68-D who had been  so  authorised under  s. 23A.  According to the appellants  the  Secretary, Home, while hearing the objections under s. 68-D of the  Act was  acting  as a quasi-judicial tribunal.  Since he  was  a member  of  the  committee  which had  made  the  report  in accordance  with which the schemes had been published  under s.  68-C it is claimed that the Secretary, Home. acted as  a Judge in his own cause.  In other words, he participated  in the policy decision of the Government and then he  exercised the   powers  under  s.  68-D  of  hearing  objections   and considering  the  merits  of  the  schemes.   This,  it   is suggested,  is  wholly  contrary to  the  rules  of  natural

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justice  the hearing by the Secretary, Home, being  vitiated by bias.  Learned single Judge of the Calcutta High Court in East  India Electric Supply, & Traction Co., Ltd. v.  S.  C. Dutta Gupta & Ors. (1) held that where a number of a  rating Committee  had already prejudged at least one of the  issues that  had been raised before it, his inclusion as  a  member made  the Rating Committee and its functioning  contrary  to law.  In Dosa Satyanarayanamurthy etc. v. The Andhra Pradesh (1) C.W.N. 162. 234 State  Road Transport Corporation(1) the Minister in  charge of  the  portfolio of Transport had presided over  the  sub- committee   constituted   to   implement   the   scheme   of nationalisation  of  bus services.  It was  contended  there that the same Minister could not be a Judge in his own  case as  he  was  biased against  the  private  operators.   That contention was negatived by this Court.  It was pointed  out that  any decision arrived at by the Sub-Committee  was  not final or irrevocable and it was only a policy decision.  The sub-committee was only meant to advise the State Government how to implement the policy of nationalisation.  That  could not  either expressly or by necessary implication involve  a predetermination  of  the issue.  The  Minister,  therefore, could not be said to have any such bias as disqualified  him from  hearing  objections under Chapter IV-A of the  Act  in which  S.  68-D  occurs.  This case is  quite  apposite  for disposing of the submission based on bias. The  second reason advanced in support of the  challenge  to the  schemes  is  based on what  is  described  as  complete absence-of  coordination so far as the various  schemes  are Concerned.   The  objectionable feature of  the  schemes  is stated  to be, that there was no proper coordination of  the services on the various routes which are to be  nationalised and which should have been done by an integrated scheme.  We are  unable  to  see that if the schemes  conformed  to  the requirements  of S. 68-C why they should be struck  down  on the  only ground that routes were to be nationalised as  and when  permits of private operators on those routes  expired. Section  68-C  permits the State  Transport  undertaking  to operate a service in relation to any area or route or even a portion thereof and to the exclusion complete or partial, of other persons.  The decision in Shrinivasa Reddy & Others v. The  State of Mysore & Others(2) can be of no avail  to  the appellants  because  no question arose  of  coordination  of service on the various routes which were to be  nationalised and  in respect of which the nationalisation was  to  become effective from different dates.  In that case it was pointed out that piecemeal nationalisation of a particular route  is not  permissible.  It is quite clear that each route can  be nationalised and it is difficult to comprehend that when the law  empowers that to be done any further conditions  should be  superimposed  of coordinating the services  on  all  the routes which are proposed to be nationalised.  The following observations  with  regard  to the above  decision  in  Dosa Satyanarayanamurthy’s case explain the law on the point :               "This Court did not lay down that there cannot               be any phased programme in the nationalisation               of  transport  services  in a State  or  in  a               district nor did it hold (1) [1961] 1 S.C.R. 642.      (2) (1960) 2 S.C.R. 130. 235               that there cannot be more than one scheme  for               a  district  or  a part  of  a  district,  the               observations  of this Court in regard  to  the               implementation  of  a  scheme  piecemeal  were

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             aimed at to prevent an abuse of power by  dis-               criminating  against  some  operators  and  in               favour  of  others  in  respect  of  a  single               scheme". Learned  Counsel  for the appellants laid a  great  deal  of emphasis  on the manner in which the policy  decisions  were taken by the Government and the mandatory language contained in  the Government Orders already referred to  which  hardly left  any discretion or choice to the authority  considering the  objections under s. 68-D of the Act.  We are unable  to see how any authority who exercises, individual power  under s.  68-D  is  bound  by what has been  stated  as  a  policy decision of the Government.  In fact his main function is to hear such objections as may be referred to the schemes  pub- lished  under  s. 68C and approve or modify the  schemes  so published after giving an opportunity to. the objector.  His function  being of a quasi-judicial nature he is to bring  a judicial approach,. to the matter and even if he happens  to be  a servant of the government he is not ’bound in any  way to carry out or endorse the policy of the Government without discharging  his duties as contemplated by s. 68-D.  We  are unable to hold nor has anything been shown to us except  the suggestion that the schemes as published under s. 68-C  were approved in toto that the authority acting under s. 68-D had not  discharged his duties in a proper and judicial  manner. The  mere fact that the schemes were approved’  without  any modification cannot establish that the Secretary, Home.  who exercised  the  functions of the State Government  under  s. 68-D, had failed to carry out his functions as laid down  in s.  68-D  or that he had approved the  schemes  without  any modification, merely because the Government orders contained language of mandatory nature. In the result these appeals fail and they are dismissed  but owing  to the nature of the points raised there will  be  no order as, to costs. S.B.W.                             Appeals dismissed. 236