TMI Blog1959 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... y provided for from the general words used in s. 6. Whatever justification there may be in that context, there is none when we are concerned with the repeal of a State Act to which s. 24 does not apply. In that situation, we have to look to the plain words of s. 6 and ascertain whether those words are comprehensive enough to take in a scheme already framed. We have no doubt that a scheme framed is a thing done under the repealed Act. The provisions starting from s. 68C only contemplate a scheme initiated after the Amending Act came into force and therefore they cannot obviously be inconsistent with a scheme already framed under the State Act before the Amending Act came into force. We, therefore, hold that s. 6 of the General Clauses Act saves the scheme framed under the U. P. Act. In all the circumstances, we cannot hold that the said appellants accepted the alternative routes. If they or some of them choose to accept any alternative routes, they are at liberty to do so, in which event they will not be entitled to any compensation. It appears that the Regional Transport Authority renewed his permit on October 11, 1956 with effect from November 1, 1953 to October 31, 1956. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrining the fundamental rights are mere checks or limitations on the legislative competency conferred on Parliament and the State Legislatures by Arts. 245 and 246 read with the relevant entries in the Lists in the Seventh Schedule to the Constitution or are an integral part of the provisions defining, prescribing and conferring the legislative competency itself and (b) whether the doc- trine of eclipse is applicable only to pre-Constitution laws or can apply also to any post-Constitution law which falls under Art. 13(2) of the Constitution. As, however, our learned Brother has thought fit to embark upon a discussion of these questions, we desire to guard ourselves against being understood as accepting or acquiescing in the conclusion that the doctrine of eclipse cannot apply to any post-Constitution law. A post-Constitution law may infringe either a fundamental right conferred on citizens only or a fundamental right conferred on any person, citizen or non-citizen. In the first case the law will not stand in the way of the exercise by the citizens of that fundamental right and, therefore, will not have any operation on the rights of the citizens, but it will be quite effective as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the U. P. Act and duly published it on April 24, 1955. Under s. 3 of the U. P. Act, the Government issued a notification dated May 17, 1955, whereunder it was directed that the aforesaid routes along with others should be exclucively served by the stage carriages of the Government and the private stage carriages should be excluded from those routes. On November 12, 1955, the State Government published the notification under s. 4 of the U. P. Act formulating the scheme for the aforesaid routes among others. The appellants received notices under s. 5 of the U. P. Act requiring them to file objections, if any, to the said scheme; and after the objections were received, they were informed that they would be heard by a Board on January 2, 1956. On that date, the objections filed by the operators other than those of the Agra region were heard and the inquiry in regard to the Agra region was adjourned to January 7, 1956. It appears that the operators of the Agra region did not appear on the 7th. The notification issued under s. 8 of the U. P. Act was pub- lished in the U. P. Gazette on June 23, 1956, and on June 25, 1956, the Secretary to the Regional Transport Authority, Agra, sent an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nconsistent with the Central Act No. 100 of 1956, has become void since the coming into operation of the aforesaid Act No. 100 of 1956 ". The judgment of the Allahabad High Court, which is the subject-matter of these appeals, was delivered on December 19, 1956. The Amending Act of 1956 was published on December 31, 1956. It is therefore manifest that the appellants could not have raised the aforesaid grounds before the High Court. Further, the grounds raise only a pure question of law not dependent upon the elucidation of any further facts. In the circumstances, we thought it to be a fit case for allowing the appellants to raise the new grounds and we accordingly gave them the permission. Mr. M. K. Nambiar, appearing for some of the appellants, raised before us the following points: (i) The Motor Vehicles (Amendment) Act (100 of 1956) passed by, the Parliament is wholly repugnant to the provisions of the U. P Act and therefore the latter became void under the provisions of Article 254(1) of the Constitution ; with the result that, at the present time, there is no valid law whereunder the Government can prohibit the appellants from exercising their fundamental right under the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therein, the State Government finally published the scheme on June 23, 1956. The Constitution (Fourth Amendment) Act, 1955, received the assent of the President on April 27, 1955. The -State Government framed the scheme under the U. P. Act after the passing of the Constitution (Fourth Amendment) Act, 1955. Under the said Amendment Act, el. (2) of Art. 31 has been amended and cl. (2A) has been inserted. The effect of the amendment is that unless the law provides for the transfer of 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 provide for the compulsory acquisition or 3 requisition of property within the meaning of cl. (2) of that Article and therefore where there is no such transfer, the condition imposed by cl. (2), viz., that the law Should fix the amount of compensation or specify the principles on which and the manner in which the compensation is to be determined and given is not attracted. If the amendment applies to the U. P. Act, as there is no transfer of property to the State, no question of compensation arises. On the other hand, if the unamended Article governs the U. P. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to clause (1), the Legislature of any State also, have power to make. laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the " Concurrent List"). (3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the " State List "). (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List." Article 13: " (1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State shall Dot make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention be void." Article 31 (Before the -Constitution (Fourth Amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... away or abridges the rights conferred by Part III, it will not avail the State to contend either that the clause does not embody a curtailment of the power to legislate or that it imposes only a check but not a prohibition. A constitutional prohibition against a State making certain laws cannot be whittled down by analogy or by drawing inspiration from decisions on the provisions of other Constitutions; nor can we appreciate the argument that the words " any law " in the second line of Art. 13(2) posits the survival of the law made in the teeth of such prohibition. It is said that a law can come into existence only when it is made and therefore any law made in contravention of that clause presupposes that the law made is not a nullity. This argument may be subtle but is not sound. The words " any law " in that clause can only mean an Act passed or made factually, notwithstanding the prohibition. The result of such contravention is stated in that clause. A plain reading of the clause indicates, without any reasonable doubt, that the prohibition goes to the root of the matter and limits the State's power to make law; the law made in spite of the prohibition is a still- born law. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provision I and a negative provision; for, both are limitations on the power. The Constitution affirmatively confers a power on the legislature to make laws within the ambit of the relevant entries in the lists and negatively prohibits it from making laws infringing the fundamental rights. It goes further and makes the -legislative power subject to the prohibition under Art. 13(2). Apparent wide power is, therefore, reduced to the extent of the prohibition. If Arts. 245 and 13(2) define the ambit of the power to legislate, what is the effect of a law made in excess of that power ? The American Law gives a direct and definite answer to this question. Cooley in his " Constitutional Limitations " (Eighth Edition, Volume I) at page 382 under the heading " Consequences if a statute is void " says :- " When a statute is adjudged to be unconstitutional, it is as if it had never been................. And what is true of an act void in toto is true also as to any part of an act which is found to be unconstitutional, and which, consequently, is to be regarded as having never, at any time, been possessed of any legal force." In Rottschaefer on Constitutional Law, much to the same effect i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 L. Ed. 572 are cited. In Newberry's Case the validity of the Federal Corrupt Practices Act of 1910, as amended by the Act of 1911, fixing the maximum sum which a candidate might spend to procure his nomination at a primary election or convention was challenged. At the time of the enactment, the Congress had no power to make that law, but subsequently, by adoption of the 17th Amendment, it acquired the said power. The question was whether an after-acquired power could validate a statute which was void when enacted. Mr. justice McReynolds delivering the opinion of the court states the principle at page 920 : " Moreover, the criminal statute now relied upon ante-dates the 17th Amendment, and must be tested by powers possessed at time of its enactment. An after-acquired power cannot, ex proprio vigore, validate a statute void when enacted." In Wilkerson's Case (1) the facts were that in June 1890, the petitioner, a citizen of the United States and an agent of Maynard, Hopkins Co., received from his principal intoxicating liquor in packages. The packages were shipped from the State of Missouri to various points in the State of Kansas and other States. On August 9, 1890, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the latter it was valid when made but it could not operate on certain articles imported in the course of inter-State trade. On that distinction is based the principle that an after- acquired power cannot, ex proprio vigore, validate a statute in one case, and in the other, a law validly made would take effect when the obstruction is removed. The same principle is enunciated in Carter v. Egg and Egg Pulp Marketing Board (1). Under s. 109 of the Australian Constitution " when a law of a State- is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. " Commenting on that section, Latham, C. J., observed at page 573: " This section applies only in cases Where, apart from the operation of the section, both the Commonwealth and the State Laws which are in question would be valid. If either is invalid ab initio by reason of lack of power, no question can arise under the section. The word " invalid " in this section cannot be interpreted as meaning that a State law which- is affected by the section becomes ultra vires in whole or in part. If the Commonwealth law were repealed the State law wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the date of the commencement of the Constitution. " At page 236, the learned Judge concludes: " So far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights." Mahajan, J., as he then was, who delivered a separate judgment, put the same view in different phraseology at page 251 : " The effect of Article 13(1) is only prospective and it operates in respect to the freedoms which are infringed by the State subsequent to the coming into force of the Constitution but the past acts of a person which came within the mischief of the law then in force are Dot affected by Part III of the Constitution." The learned Judge, when American law was pressed on him in support of the contention that even the pre-Constitution law was void, observed thus, at page 256 : " It is obvious that if a statute has been enacted and is repugnant to the Constitution, the statute is void since its very birth and anything done under it is also void and illegal. The courts in America have followed the logical result of this rule and even convictions made under such an unconstitutional statute have been set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13(1) nullified or rendered all inconsistent existing laws ineffectual, nugatory or devoid of any legal force or binding effect with respect to the exercise of the fundamental rights. So far as the past acts were concerned, the law existed, notwithstanding that it did not exist with respect to the future exercise of the said rights. As regards the pre-Constitution laws, this decision contains the seed of the doctrine of eclipse developed by my Lord the Chief Justice in Bhikaji Narain Dhakras v. The State of Madhya Pradesh [1955] 2 S.C.R. 589 where it was held that as the pre-Constitution law was validly made, it existed for certain purposes even during the post- Constitution period. This principle has no application to post-Constitution laws infringing the fundamental rights as they would be ab initio void in toto or to the extent of their contravention of the fundamental rights. The observations of the learned judges made in the decision cited above bring out the distinction between pre and post- Constitution laws which are repugnant to the Constitution and the impact of Art. 13 on the said laws. In Behram Khurshed Pesikaka's Case [1955] 1 S.C.R. 613, this Court considered the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with this case on that assumption." This passage shows that his opinion-though a tentative one- was that the severable part became unenforceable while it remained part of the Act. But the learned Judge made an incidental observation that the American view applied to cases that fall within the scope of Art. 13(2) of the Constitution, i.e., the entire legislation would be unconstitutional from the very commencement of the Act. Venkatarama Aiyar, J., founded his decision on a broader basis. At page 639, the learned Judge observed: " Another point of distinction noticed by American jurists between unconstitutionality arising by reason of lack of legislative competence and that arising by reason of a check imposed on a competent Legislature may also be mentioned. While a statute passed by a Legislature which had no competence cannot acquire validity when the Legislature subsequently acquires competence, a statute which was within the competence of the Legislature at the time of its enactment but which infringes a, constitutional prohibition could 'be enforced 'Proprio vigore when once the prohibition is removed." On the basis of this distinction, the learned Judge held that Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute is repugnant to the Constitution the statute is void from its birth, has no application to cases concerning obligations incurred or rights accrued in accordance with an existing law that was constitutional in its inception, but that if any law was made after the 26th January, 1950, which was repugnant to the Constitution, then the same rule shall have to be followed in India as followed in America. The result therefore of this pronouncement is that the part of the section of an existing law which is unconstitutional is not law, and is null and void. For determining the rights and obligations of citizens the part declared void should be notionally taken to be obliterated from the section for all intents and purposes, though it may remain- written on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to 26th January, 1950, and also for the determination of rights of persons who have not been given fundamental rights by the Constitution. Thus, in this situation, there is no scope for introducing terms like " relatively void " coined by American Judges in construing a Constitution which is not drawn up in similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government made a declaration extending the Act to a particular area and issued a notification setting out what purported to be a scheme for the operation of the stage carriage service on certain routes. At the time the said Act was passed, the State had no such power to deprive a citizen of his right to carry on his transport service. But after the Act, Art. 19(1) was amended by the Constitution (First Amendment)Act, 1951, enabling the State to carry on any trade or business either by itself or through, corporations owned or controlled by the State to the. exclusion of private citizens wholly or in part. One of the questions raised was whether the amendment of the Constitution could be invoked to validate the earlier legislation. The Court held that the Act when passed was unconstitutional and therefore it was still-born and could not be vitalised by the subsequent amendment of the Constitution removing the constitutional objections but must be re-enacted. At page 728, Mukherjea, J., as he then was, who delivered the judgment of the Court, has given the reasons for the said view :- " As Professor Cooley has stated in his work on Constitutional Limitations (Vol. 1, page 304 not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect of nullifying or rendering the existing law which had become inconsistent with article 19(1) (g) read with clause (6) as it then stood ineffectual, nugatory and devoid of any legal force or binding effect only with respect to the exercise of the fundamental right on and after the date of the commencement of the Constitution. Therefore, between the 26th January, 1950, and 18th June, 1951, the impugned Act could not stand in the way of the exercise of the fundamental right of a citizen under Article 19(1)(g). The true position is that the impugned law became, as it were, eclipsed, for the time being, by the fundamental right The American authorities refer only to post-Constitution laws which were inconsistent with the provisions of the Constitution. Such laws never came to life but were still- born as it were Such laws were not dead for all purposes. They existed for the purposes of pre-Constitution rights and liabilities and they remained operative, even after the Constitution, as against non-citizens. It is only as against the citizens that they remained in a dormant or moribund condition." The aforesaid passages are only the restatement of the law as enunciated in Keshavan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained in a dormant or moribund condition." The first part of the said observation states nothing more than the plain import of the provisions of Art. 13(1) and (2), namely, that they render laws void only I to the extent' of such inconsistency. The second part of the observation directly applies only to a case covered by Art. 13(1), for the learned Judges say that the laws exist for the purposes of pre-Constitution rights and liabilities and they remain operative even after the Constitution as against non-citizens. The said observation could not obviously apply to post-Constitution laws. Even so, it is said that by a parity of reasoning the post-Constitution laws are also void to the extent of their repugnancy and therefore the law in respect of non-citizens will be oil the statute book and by the application of the doctrine of eclipse, the same result should flow in its case also. There is some plausibility in this argument, but it ignores one vital principle, viz., the existence or the non-existence of legislative power or competency at the time the law is made governs the situation. There is no scope for applying the doctrine of eclipse to a case where the law is void ab initio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons found in Part III which, notwithstanding other provisions, are expressly made enforceable by appropriate Writs, Orders or directions under article 32." Basing his argument on the aforesaid two observations, it is contended that in the case 'of both the directive principles and the fundamental rights, it must be held that the infringement of either does not invalidate the law, but only makes the law unenforceable. This argument, if we may say so, mixes up the Constitutional invalidity of a statute with the procedure to be followed to enforce the fundamental rights of an individual. The Constitutional validity of a statute depends upon the existence of legislative power in the State and the right of a person to approach the Supreme Court depends upon his possessing the fundamental right, i.e., he cannot apply for the enforcement of his right unless it is infringed by any law. The cases already considered supra clearly establish that a law, whether pre-Constitution or post-Constitution, would be void and nugatory in so far as it infringed the fundamental rights. We do not see any relevancy in the reference to the directive principles; for, the legislative power of a State is onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings done under the repealed Act was excluded. The learned Advocate General attempted to meet the double attack by pressing on us to hold that there was no repugnancy at all between the provisions of the Central Act and the U. P. Act and therefore the U. P. Act had neither become void nor was repealed by necessary implication by the Central Act. We shall now examine the provisions of Art. 254(1) and 254(2). Article 254: "(1) If any provisions of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of 6 such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs over the same subject matter." This Court in Ch. Tika Ramji v. The State of Uttar Pradesh [1956] S.C.R. 393. accepted the said three rules, among others, as useful guides to test the question of repugnancy. In Zaverbhai Amaidas v. The State of Bombay [1955] 1 S.C.R. 799, this Court laid down a similar test. At page 807, it is stated: " The principle embodied in section 107(2) and Article 254(2) is that when there is legislation covering the same ground both by the centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State."- Repugnancy between two statutes may thus be ascertained on the basis of the following three principles: (1) Whether there is direct conflict between the two provisions ; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field. We shall now examine the provisions of both the Acts in some detail in order to ascertain the extent of the repugnancy between them. The Scheme of the U. P. Act ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transport Commissioner. The Board shall consider the objections, if any, forwarded under s. 6 and may either confirm, modify or alter the scheme. The Scheme so confirmed or modified or altered under s. 7 shall be published in the Official Gazette. Any scheme published under s. 8 may at any time be cancelled or modified or altered by the State Government. Section 10 gives the consequences of the publication under s. 8. Section 11 provides compensation for premature cancellation of permits or curtailment of route or routes, as may be determined in accordance with the principles specified in Schedule 1. In Schedule 1, compensation is payable as follows: " (1) For every complete month or Rupees one part of a month exceeding fifteen days of hundred. the unexpired period of the permit. (2) For part of a month not exceed- Rupees ing fifteen days of the unexpired fifty. period of a permit. Provided always that the amount of compensation shall in no case be less than rupees two hundred." Section 12 authorises the State Government, in a case where the permit has been cancelled, to purchase the motor vehicle covered by it if the holder of the permit offers to sell, upon terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said Scheme before the State Government; the State Government may, after considering the objections 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, approve or modify the Scheme. Any Scheme published may at any time be cancelled or modified by the State Transport Undertaking following the same procedure; for the purpose of giving effect to the Scheme, the Regional Transport Authority, inter alia, may cancel the existing permits or modify the terms of the existing permits. Section 68G lays down the principles and method of determination of compensation. Under that section compensation is, payable for every completed month or part of a month exceeding fifteen days of the unexpired period of the permits at Rs. 200 and for part of a month not exceeding fifteen days of the unexpired period of the permit at Rs.100. Under the Amending Act, the gist of the provisions is that the Scheme is initiated by the State Transport Undertaking carried on by any of the four institutions mentioned in s. 68A, including the State Government; objections are filed by the affected parties to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme, the principles of compensation and the manner of its payment also differ in the two Acts. It is therefore manifest that the Amending Act occupies the same field in respect of the schemes initiated after the Amending Act and therefore to that extent the State Act must yield its place to the Central Act. But the same cannot be said of the schemes framed under the U. P. Act before the Amending Act came into force. Under Art. 254(1) " the law made by Parliament, whether passed before or after the law made by the Legislature of such State............ shall prevail and the law made by the legislature of the State shall, to the extent of the repugnancy, be void." Mr. Nambiar contends that, as the U. P. Act and the Amending Act operate in the same field in respect of the same subject-matter, i. e., the nationalization of bus transport, the U. P. Act becomes void under Art. 254(1) of the Constitution. This argument ignores the crucial words " to the extent of the repugnancy " in the said clause. What is void is not the entire Act but only to the extent of its repugnancy with the law made by Parliament. The identity of the field may relate to the pith and substance of the subject-mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist to operate during different periods. The same decision also affords a solution to the question mooted, namely, whether if the law was void all the completed transactions fall with it. Mahajan, J., as he then was, draws a distinction between a void Act and a repealed Act vis-a-vis their impact on past transactions. At page 251, the learned Judge says: The expression is void " has no larger effect on the statute so declared than the word " repeal ". The expression " repeal " according to common law rule obliterates a statute completely as if it had never been passed and thus operates retrospectively on past transactions in the absence of a saving clause or in the absence of provisions such as are contained in the Interpretation Act-, 1889, or in the General Clauses Act, 1897, while a provision in a statute that with effect from a particular date an existing law would be void to the extent of the repugnancy has no such retrospective operation and cannot affect pending pro- secutions or actions taken under such laws. There is in such a situation no necessity of introducing a saving clause and it does not need the aid of a legislative provision of the nature contained in the Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a Central Act but not a State Act. But the exclusion of the scheme is sought to be supported on the basis of the argument that in the case of a repeal of a Central Act, both the sections apply and, in that context, a reasonable interpretation would be to exclude what is specifically provided for from the general words used in s. 6. Whatever justification there may be in that context, there is none when we are concerned with the repeal of a State Act to which s. 24 does not apply. In that situation, we have to look to the plain words of s. 6 and ascertain whether those words are comprehensive enough to take in a scheme already framed. We have no doubt that a scheme framed is a thing done under the repealed Act. A further contention is raised on the basis of the provisions of s. 68B to achieve the same result, namely, that the said section indicates a different intention within the meaning of s. 6 of the General Clauses Act. Section 68B reads: " The provisions of this Chapter and rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the meaning of el. (2) of the said Article. After a faint attempt to raise this question, the learned Advocate General conceded that in view of the decision in Saghir Ahmad's Case he could not support his argument to the effect that the State did not deprive the petitioners of their interest in a commercial undertaking. In the said case, this Court held in express terms that U. P. Transport Act, 1951, which, in effect prohibited the petitioners therein from doing their motor transport business deprived them of their property or interest in a commercial undertaking within the meaning of Art. 31(2) of the Constitution. Mukherjea J., as he then was, observed at page 728 : " It is not seriously disputed on behalf of the respondents that the appellants' right to ply motor vehicles for gain is, in any event, an interest in a commercial undertaking. There is no doubt also that the appellants have been deprived--of this interest." The learned Judge proceeded to state at page 729 : " In view of that majority decision it must be taken to be settled now that clauses (1) and (2) of article 31 are not mutually exclusive in scope but should be, read together as dealing with the same subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expropriated owner, the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable. Whether such principles take into account all the elements which make up the true value of the property appropriated and, exclude matters which are to be neglected, is a justiciable issue to be adjudicated by the Court., This, indeed, was not disputed. " On the basis of the aforesaid principle, Mr. Nambiar contends that the U. P. Act does not provide for compensation in the sense of giving the operator deprived of his interest a just equivalent of what he has been deprived of, or fix any principles to guide the determination of the amount payable. The U.P. Act, the argument proceeds, does not provide at all for compensation payable in respect of the interest of the operator in a commercial undertaking, but only gives compensation for the unexpired period of the permit. On the other hand, the learned Advocate General contends that the appellants would be entitled only to just equivalent of the interest that they are deprived of, namely, the interest in a commercial undertaking and that the cumulative effect of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curtailment of the route covered by the permit. (3) There shall be paid by the State Government on the amount of compensation determined under subsection (1) interest at the rate of two and one-half per cent. from the date of order of cancellation or curtailment of route to the date of determination of compensation as aforesaid. (4)The compensation payable under this section shall be given in cash. (5) The amount of compensation to be given in accordance with the provisions of sub-section (1) shall be determined by the Transport Commissioner and shall be offered to the permit-holder in full satisfaction of the compensation payable under this Act and if the amount so offered is not acceptable to the permit-holder, the Transport Commissioner may within such time and in such manner as may be prescribed refer the matter to the District Judge whose decision in the matter shall be final and shall not be called in question in any Court. " Section 12: " Where a permit granted under Chapter IV of the Motor Vehicles Act, 1939, has been cancelled or the route to which the permit relates has been curtailed in pursuance of the scheme published under section 8, the State Government may i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount so offered is not acceptable to the permit-holder, the Transport Commissioner may, within such time and in such manner as may be prescribed, refer the matter to the District Judge whose decision in the matter shall he final. There is also a provision enabling the Government to purchase the motor vehicles covered by the permit, if the holder of the permit offers to sell and if the vehicles satisfy the specifications laid down in the Act. The question is whether these provisions offer a quid pro quo for the interest of the petitioners in the commercial undertaking i.e., business in motor transport. Let us examine the question from the standpoint of a business deal. If the transport business is sold, the seller gets his value for the assets minus the liabilities and for his good-will. In the case of a scheme framed under the Act, the assets are left with the holder of the permit and under certain conditions the State purchases them. As the scheme is a phased one, it cannot be said, though there will be difficulties, that the assets cannot be sold to other operators. If a permit is not cancelled but only transferred to another route, it may be assumed that if the transfer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensation at flat rate and realising the inadequacy of the rule of thumb to meet varying situations, it entrusted the duty of the final determination of compensation to a judicial officer of the rank of a District Judge. The provisions of s. 11(5), in our view, are certainly susceptible of such. an interpretation as to carry out the intention of the legislature indicated by the general scheme of the provisions. The crucial words are " if the amount so offered is not acceptable to the permit-holder ". The amount offered is no doubt the amount calculated in accordance with s.11(1). But a duty is cast on the Transport Commissioner to refer the matter to the District Judge if the amount offered is not acceptable to the permit-holder. The word" acceptable" is of very wide connotation and it does not limit the objection only to the wrong calculation under s. 11(1). The permit- holder may not accept the amount on the ground that compensation offered is inadequate and is not a quid pro quo for the interest of which he is deprived. It is therefore for the District Judge, on the evidence adduced by both the parties, to decide the proper compensation to be paid to him in respect of the right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government and partly by others under and in accordance with the provisions of this Act. (2) The notification under sub-section (1) shall be conclusive evidence of the facts stated therein. " The argument of the learned Counsel on the interpretation of this section appears to be an after-thought; for the records do not disclose that the appellants attempted to question the said fact before the Government and they were precluded from doing so on the basis of cl. (2) of s. (3). We are not, therefore, prepared to allow the appellants to raise the contention for the first time before us. The last contention, which is special to Civil Appeal No. 429 of 1958, is that during the crucial period when the scheme of nationalization was put through, the appellant had no permit, it having been cancelled by the order of the appropriate tribunal; but subsequently, after the scheme was finalised, the said order was set aside by the Appellate Tribunal retrospectively and therefore the order of the State Government made behind the back of the appellant does not bind him. The appellant's permit was not renewed by the Regional Transport Authority. Against the said order, he preferred an appeal to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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