TMI Blog1958 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1956, hereinafter called the Act, in respect of various routes. They estimate the value of their investment in the -business at a sum of ₹ 20,00,000. The amending Act inserted a new Chapter IV-A in the Act providing for the State Transport Undertaking running the business to the exclusion, complete or partial, of all other persons doing business in the State. Chapter IV-A provided for a machinery called the State Transport Undertaking, defined under s. 68-A(b) as an undertaking providing road transport service, to run the transport business in the State. In exercise of the powers conferred by s. 68-C of the Act, one Shri Guru Pershad, styled as the General Manager of the State Transport Undertaking of the Andhra Pradesh Road Transport, published a scheme for the purpose of providing an efficient, adequate, economical and properly coordinated transport service in public interest to operate the transport service mentioned therein with effect from the date notified by the State Government. Objections were invited within 30 days from the date of the publication of the proposal in the Official Gazette, viz., November 14, 1957. 138 objections were received. Individual notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding for compensation for the entire undertakings and therefore it is a fraud on the Constitution, particularly on Art. 31 thereof. Shortly stated, his argument is that under Art. 31 of the Constitution no law shall be made for the transfer of ownership or right to possession of any property to the State or to a Corporation without fixing the amount of compensation or specifying the principles on which compensation is to be determined and given, and that Chapter IV-A of the Act is a colourable legislation enabling such a transfer of ownership without providing for compensation for the property transferred, under the guise of cancellation of a permit. To appreciate this argument it would be convenient, at this stage, to read the relevant provisions of the Articles of the Constitution, omitting the words unnecessary for the purpose of this case. Art. 191 : All citizens shall have the right- (g) to practise any profession, or to carry on any occupation, trade or business. (6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deprivation contemplated in clause (1) being no other than the acquisition or taking possession of property referred to in clause (2). In Dwarkadas s case (1),this Court, while confirming the aforesaid principle, held that the word acquisition has quite a wide concept, meaning the procuring of property or the taking of it permanently or temporarily and need not be confined to the acquisition of legal title by the State in the property taken possession of In Saghir Ahmed s case (3) applying the said principles, this Court held (at p. 728): If the effect of prohibition of the trade or business of the appellants (citizens) by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of Art. 31 (2) of the Constitution, does not the legislation offend against the provision of that clause inasmuch as no provision for compensation has been made in the Act? (1) [1954] S.C.R. 587, 608. (2) [1954] S.C.R. 674. (3) [1955] 1 S.C.R. 707, 728. It may be noted that though the said decision was given after the Constitution (First) Amendment Act 195 1, amending Art. 19 (6), it dealt with a matter that arose be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga(l). In that case the constitutional validity of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), was questioned. In the context of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), it was contended that the impugned Act was a fraud on the Constitution and therefore void. It -was stated that the Act, while pretending to comply with the Constitutional provisions when it provided for the payment of compensation, in effect produced a scheme for non-payment of compensation by shift or contrivance. Mahajan, J., as he then was, in rejecting the argument observed at p. 947, thus: All these principles are well-settled. But the question is whether they have any application to the present case. It is by no means easy to impute a dishonest motive to the legislature of a State and hold that it acted mala fide and maliciously in passing the Bihar Land Reforms Act or that it perpetrated a fraud on the Constitution by enacting this law. It may be that some of the provisions of the Act may operate harshly on certain persons or a few of the zamindars and may be bad if they are in excess of the legislative power of the Bihar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears on proper examination, to be a mere presence or disguise. As was said by Duff, J., in Attorney-General for Ontario v. Reciprocal Insurers (1924 A. C. 328 at p. 337): Where the law making authority is of a limited or qualified character it may be necessary to examine (1) [1954] S.C.R. i. with some strictness the substance of the legislation for the purpose of determining what is that the legislature is really doing. In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject-matter in substance is, something which is beyond the powers of that legislature to legislate upon, the form in which the law is clothed would not save it from condemnation. The legislature cannot violate the constitutional prohibitions by employing an indirect method. We have quoted the observations in extensor as they neatly summarise the law on the subject. The legal position may be briefly stated thus: The legislature can only make laws within it legislative competence. Its legislative field may be circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Art. 19 of the Constitution. The Motor Vehicles Act, 1939 (IV of 1939), regulates the right of a citizen to carry on the said business for protecting the rights of the public generally. Permit is defined under cl. (20) of s. 2 of the Act to mean the document issued by the Commission or a State or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage or stage carriage, or authorising the owner as a private carrier or public carrier to use such vehicle. Section 57 of the Act prescribes the procedure for applying for and granting permits to carry on the business in transport vehicles on public highways. Section 47 lays down the matters to be considered by the Regional Transport Authority in the disposal of applications for such transport carriers. Section 59 gives the conditions of every permit and also prohibits the transfer of permit. from one person to another except with the permission of the Transport Authority. Under s. 60, the Transport Authority which granted permit may cancel the permit or may suspend it for such period as it thinks fit for any of the reasons mentioned therein. Section 61 provides for cases where, a permit-hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Chapter IV-A was inserted in the Act, we cannot see that the power of cancellation of an existing permit and issuing one to the State Transport Undertaking should involve a transfer of the previous permit-holder s business to the State Transport Undertaking. The argument that the process contemplated by s. 68-F of the Act involves two integrated steps, viz., cancelling the existing permit and preventing the previous permit-holder from doing the business and then issuing a permit to a nominee of the State to enable it to do the same business and thereby, in effect and substance, transferring the business of the existing permit-holder to the State or its nominee, appears to be attractive, but, in our view, it is fallacious. It may be that by the said process the existing permit-holder is precluded from doing his business and it may also be that the State Transport Undertaking carries on a similar business; but by no stretch of language or extension of legal fiction can it be said that the State Transport Undertaking is doing the same business which the previous permit- holder was doing. If there is no transfer in the case of cancellation of a permit in favour of one and issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for compulsory acquisition or requisition of property ; and therefore, in such a case, no compensation need be provided for under Art. 31(2) of the Constitution. We therefore hold that Chapter IV-A of the Act does not infringe the fundamental right of the petitioners under Art. 31 of the Constitution of India. The next argument of the learned counsel for the petitioners is that even if Chapter 1V-A of the Act is constitutionally valid, the petitioners could be deprived of their rights only in accordance with the law enacted for the purpose and in the manner provided therein, and that in the present case, the scheme was promulgated in derogation of the provision of the said Chapter. The learned counsel contends that the provisions of Bs. 68-C and 68-D have not been complied with in framing the scheme. The learned counsel s contentions in this regard fall under different sub-heads, and we shall proceed to consider them seriatim. The first contention is that no State Transport Undertaking is constituted under the Central Act and therefore the scheme initiated by the said Transport Undertaking constituted under the Motor Vehicles (Hyderabad Amendment) Act, 1956, ,as bad. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Andhra Pradesh Road Transport Department providing road transport service in Telengana, which is a part of that State, and that Department, when it was a part of the Hyderabad State was functioning as part of the Hyderabad State Secretariat. The mere fact that the Road Transport Department of the Andhra Pradesh State was originally part of a department of another State and came under the definition of the State Transport Undertaking of the Hyderabad Act could not make the said department any the less the Road Transport Department of the Andhra Pradesh State. Assuming. for a moment that the Hyderabad Act is still in force in the Telengatia area, there is nothing in law which prevents a department coming under the definition of two statutes. Under the Act, the State Transport Undertaking means an Undertaking providing road trasport service where such undertaking is carried on by a State Government. This section does not prescribe the parentage of the undertaking or impose a condition that the undertaking should be providing transport service throughout the State. The State Government maintained the department for providing road transport service and therefore the department clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have been appointed as the -General Manager of the Undertaking under the Central Act. This is the first argument under a different garb. The preexisting Road Transport Department of the erstwhile Hyderabad State, with its General Manager, Sri Guru Pershad, continued to function as a statutory authority under the Central Act and therefore he had the legal authority to represent the State Transport Undertaking, which was a statutory authority. lie published the scheme and subscribed it as Guru Pershad, the General Manager of the State Transport Undertaking (Andhra Pradesh State Road Transport). The notification, therefore, must be held to have been issued by the State Transport Undertaking functioning under the Central Act. The learned counsel then contends that the scheme published does not disclose that the State Transport Undertaking was of the opinion that the scheme was necessary in the interests of the public and, therefore, -is the necessary condition for the initiation of the scheme was not complied with, the scheme could not be enforced. Section 68-C says that where any State Transport Undertaking is of opinion that for specified reasons it is necessary in the public in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its opinion in that regard. We gather from a reading of the scheme that the State Transport Undertaking formed the necessary opinion before preparing the scheme and publishing it. The argument of the learned counsel carries technicality to a breaking point and for the aforesaid reasons, we reject it. The next attack of the learned counsel centres round the provisions of s. 68-D (2) of the Act. It would be convenient, before adverting to his argument, to read 339 s. 68-D and the relevant rules made under the Act. They read : Sec. 68-D : (1) Any person affected by the scheme published under s. 68-C may, within thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government. (2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter, if they so desire, approve or modify the scheme. (3) The scheme as approved or modified under sub-section (2) shall then be published in the Official Gazette by the State Government and the same shall thereupo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case: After the scheme was prepared and published in the Official Gazette, the petitioners and others filed objections before the Secretary to Government Transport Department, within the time prescribed. 138 objections were received and individual notices were issued by the Government by registered post to all. the objectors fixing the date of the hearing for December 26, 1957. The Secretary to Government, Home Department, in charge of Transport, heard the representations made by the objectors, some in person and others through their advocates, and also the representation is made by the General Manager of the Road Transport Undertaking. The Secretary, after hearing the objections, prepared notes and placed the entire matter, with his notes, before the Chief Minister, who considered the matter and passed orders rejecting the objections and approving the scheme; and the approved scheme was thereafter issued in the name of the Governor. On the aforesaid facts, the first contention raised is that the State Government in approving the scheme was discharging a quasi-judicial act and therefore the Government should have given a personal hearing to the objectors instead of entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd Justice Scrutton in Rex v. London County Council, Ex Parte Entertainments Protection Association Ltd. (2) and authoritatively re-stated by this Court in Province of Bombay v. Khusaldas S. Advani (3) . They laid down the following conditions: (a) the body of persons must have legal authority; (b) the authority should be given to determine questions affecting the rights of subjects and (c) they should have a duty to act judicially. In the last of the cases cited supra, Das, J., as he then was, analysed the scope of the third condition thus at page (i) that if a statute empowers an authority not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and (ii)that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estionnaire issued to all parties interested and the evidence led before it, there is no doubt that there would be imported in the proceedings of the Wage Board a duty to act judicially and the functions (1) A.I.R. 1958 S. C. 398. (2) A.I.R. 1958 S.C. 578. performed by the Wage Board would be quasi-judicial in character. The aforesaid three decisions lay down that whether an administrative tribunal has a duty to act judicially should be gathered from the provisions of the particular statute and the rules made thereunder, and they clearly express the view that if an authority is called upon to decide respective rights of contesting parties or, to put it in other words, if there is a lis, ordinarily there will be a duty on the part of the said authority to act judicially. Applying the aforesaid test, let us scrutinize the provisions of ss. 68-C and 68-D and the relevant rules made under the Act to ascertain whether under the said provisions the State Government performs a judicial act or an administrative one. Section 68-C may be divided into three parts: (1) The State Transport Undertaking should come to an opinion that it is necessary in public interest that the road transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public or on the ground that the route which he is exploiting should be excluded from the scheme for various reasons., There is, therefore, a proposal and an opposition and the third party, the State Government is to decide that lis and prima facie it must do so judicially. The position is put beyond any doubt by the provision in the Act and the Rules which expressly require that the State Government must decide the dispute according to the procedure prescribed by the Act and the Rules framed thereunder, viz., after considering the objections and after hearing. both the parties. It therefore appears to us that this is an obvious case where the Act imposes a duty on the State Government to decide the act judicially in approving or modifying the scheme proposed by the Transport Undertaking. The learned Attorney General argues that ss. 68-C and 68-D do not contemplate the enquiry in regard to the rights of any parties, that the scheme proposed is only for the purpose of an efficient, adequate, economical and properly coordinated bus transport service and should relate only to that purpose and that, therefore, the enquiry contemplated under s. 68-D, though assimilated to a judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venage, on October 7 and 8, 1946, and on October 25, made a report to the respondent in which he set out a summary of the sub. missions made and the evidence given by and on behalf of the objectors and attached thereto a complete transcript of the proceedings, which began with an opening statement by Mr. Morris giving a brief recapitulation of the reasons that had led to the designation of Stevenage as the site of a New Town. On November 11, 1946, the respondent made the order in terms of paragraph 4 of Schedule I to the Act. The appellants applied to the High Court to have the order quashed.. It was contended, inter alia, that the said order was not within the powers of the New Towns Act, 1946, or alternatively, that the requirements of the said Act have not been complied with; that the Minister who made the order had stated, before the Bill was made into law, that he would make the said order, and therefore he was biassed in any consideration of the said objections. The House of Lords held that the respondent s functions under the Act were only administrative and that he had complied with the provisions of the statute. In that view, the order of the Court of Appeal dismissing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Act not having been complied with. The steps to be taken for nationalising the Road Transport under the Act are as follows: (1) The State Transport Undertaking, which is a statutory authority under the Act, proposes a scheme; (2) the scheme may provide that the road transport services should -be run or operated by the State Transport Undertaking to the exclusion of a person or persons; (3) any Person, affected may file objections before the Government;(4) the Government following the rules of judicial procedure decides the dispute between the Undertaking and -the person or persons affected; (5)the dispute is not necessarily confined only to the questionwhether the statutory requirements have been complied with, but may also relate to the question whether a particular person or persons should not. be excluded; and (6) a personal hearing should be given to both the parties by the Government.. A comparison of the procedural steps under both the Acts brings out in bold relief the nature of the enquiries contemplated under the two statutes. There, there is no lis, no personal hearing and even the public enquiry contemplated by a third party is presumably confined to the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, 7b). At page 178, they conclude thus: It is submitted, however, that the thoroughness with which the Courts analysed the statutes in the Errington, Robinson, Johnson and Franklin Cases and the emphasis which they have placed on the fact that their decisions have been based solely on the statute under consideration makes such an approach inevitable. It is therefore clear that Franklin s Case is based upon the interpretation of the provisions of that Act and particularly on the ground that the object of the enquiry is to further inform the mind of the Minister and not to consider any issue between the Minister and the objectors. The decision in that case is not of any help to decide the present case, which turns upon the construction of the provisions of the Act. For the aforesaid reasons, we hold that the State Government s order under s. 68-D is a judicial act. The next question is whether the State Government disposed of the objections of the petitioners judicially in the manner prescribed by the Act. It is said that under the Act and rules framed thereunder, the State Government should hear the dispute, but in this case the Secretary in charge of the Transport Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs shall be sent to the Governor and the Chief Minister. Rule 11 says that I all orders or instruments made or executed by or on behalf of the Government of the State shall be expressed to be made or executed in the name of the Governor . Under r. 12, every order or instrument of the Government of the State shall be signed either by a Secretary, an Additional Secretary, a Joint Secretary, a draftsman, a Deputy Secretary, an, Under Secretary or an Assistant Secretary to the Government of the State or such other officers as may be specially empowered in that behalf and such signature shall be deemed to be the proper authentication of such order or instrument . After the formation of the Andhra State on, October 3, 1953, the rules made by the Governor of Madras, under the provisions of the States Reorganization Act, Continue to be the rules of the Andhra State till they are amended in accordance with , such law. The Governor of Andhra State, in exercise of the powers conferred by cls. (2) and (3) of Art. 166 of the Constitution directed that until other provisions are made in this regard, the business of the Government of Andhra be transacted in accordance with the Madras Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a fallacy in this argument. The concept of a quasijudicial act implies that the act is not wholly judicial; it describes only a duty cast on the executive body or authority to conform to norms of judicial procedure in performing some acts in exercise of its executive power. The procedural rules made by the Governor for the convenient transaction of business of the State Government apply also to quasi-judicial acts, provided those Rules conform to the principles of judicial procedure. The mode of performing quasi-judicial acts by administrative tribunals has been the subject of judicial decisions in England as well as in India. The House of Lords in Local Government Board v. Arlidge (1) in the context of the Housing, Town Planning Etc., Act, 1909, made the following observations at page 132: My Lords, when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially. They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made. The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he is himself a party, or interested as a party, affords the strongest proof that he cannot be indifferent. In Rex v. Sussex Justices Ex Parte McCarthy (2) Lord Hewart, C. J., observed: It is said, and, no doubt, truly, that when that gentleman retired in the usual way with the justices, taking with him the notes of the evidence in case the justices might desire to consult him, the justices came to a conclusion without consulting him, and that he scrupulously abstained from referring to the case in any way. But while that is so, a long line of cases shows that it is not merely of some importance (1) [1854] 5 H.L.C. 72, 89; 10 E.R. 824, 827. (2) [1924] 1 K.B. 256, 258. but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done. The question therefore is not whether in this case the deputy clerk made any observation or offered any criticism which he might not properly have made or offered; the question is whether he was so related to the case in its civil aspects as to be unfit to act as clerk to the justices in the criminal matter. The answer to that question depends not upon what actually was done, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments, and the party- appearing to persuade the authority by reasoned argument to accept his point of view. If one person hears and another decides, then personal hearing becomes an empty formality. We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure. The learned counsel further contends that the mind of the State Government was foreclosed before the hearing was given and therefore no real enquiry was held by it as contemplated by the Act. This argument is based upon the reports published on 27-12-1957 in the Deccan Chronicle and Golconda Patrika . Therein it was stated under date December, 26, as follows : The Chief Secretary, Mr. M. P. Pai, told pressmen today that the Government has already taken a decision to nationalize the road transport in Krishna District and some routes had been chosen. The Guntur-Vijayawada route also comes under the nationalisation scheme. About 65 buses would be plying oil these routes. The Chief Secretary was giving this information on December 6, 1957, even before the enquiry was commenced. On the basis of this publication, it is contended, that the Government had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Undertaking and to implement the scheme initiated by that Undertaking. The said Corporation admittedly comes under the definition of State Transport, Authority under the Act. But the question is whether- the said Corporation is also a successor to the State Transport Authority that initiated the scheme. It would certainly be the successor if the Corporation was legally entrusted with the duty of carrying on the business the Road Transport Department was doing before. On January 9, 1958, in exercise of the powers conferred by s. 3 of the Road Transport Corporations Act, 1950, the Governor of Andhra Pradesh established with effect from January 11, 1958, a Road Transport Corporation called the Andhra Pradesh Road Transport Corporation for the State of Andhra Pradesh. In exercise of the power conferred by s. 34 of the Road Transport Corporations Act, 1950, the Governor of Andhra Pradesh made an order dated 11th January, 1958, for the following administrative arrangements to come into force (I) The Andhra Pradesh Road Transport Corporation (hereinafter referred to as the Corporation) shall take over the management of the existing Road Transport Department of the Government of And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch relevancy for, in this case, the Corporation does not purport to acquire any transport undertaking of the petitioners. It has not been brought to our notice that the said direction is inconsistent with any of the provisions of the Road Transport Corporations Act, 1950. We, therefore, hold that the first respondent is the successor to the State Transport Undertaking which proposed the scheme and as admittedly it satisfied the requirements of the definition of I Road Transport Authority under the Act, it is within its rights in implementing the scheme approved by the Government. In the result, for the reason that the State Government did not make the enquiry consistent with the principles of natural justice in approving the scheme, the order approving the scheme is hereby quashed and a direction issued to the first respondent to forbear from taking over any of the routes in which the petitioners are engaged in transport business. This judgment will not preclude the State Government from making the necessary enquiry in regard to the objections filed by the petitioners in accordance with law. The petitioners will have liberty to file additional objections if any. As the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird step is that the State Government has to consider 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, to approve or modify the scheme; (s. 68D (2)). Finally, the scheme as approved or modified is published in the Official Gazette as the approved scheme; (s. 68D(3)). Then comes the provisions for putting. this approved scheme into effect. Section 68F provides that the Regional Transport Authority shall thereupon issue permits to the State Transport Undertaking on its application in pursuance of the approved scheme. The Regional Transport Authority is also given power to cancel or modify any existing permit or refuse to renew any existing permit for this purpose. Section 68G provides for compensation where any existing permit is cancelled or its terms are modified. The main attack of the petitioners is that sections 68C and 68D were not complied with. The particulars of the attack may be summarised as below:- (1) There was no State Transport Undertaking in existence which could have published the scheme (68C) (2) Even if a State Transport Undertaking w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of the Transport Department on the 26th and 27th of December, 1957. The scheme was finally approved by the Governor of Andhra Pradesh on the 7th of January, 1958, and was to come into force from the 10th of January, 1958. The approved scheme was published in the Gazette on January 9, 1958. In the meantime, the Government of Andhra Pradesh decided to establish a Road Transport Corporation under the Road Transport Corporations Act, No. LXIV of 1950, for the State of Andhra Pradesh. This decision was published on the 20th of December, 1957, and the Road Transport Corporation was to come in existence from the 11th of January, 1958. It was to take over the business of the Road Transport Department of the State. The members of the Road Transport Corporation were appointed on the 9th of January, 1958, and the Corporation was established with effect from the 11th of January, 1958. It was this Corporation, which took over the duty of implementing the approved scheme, which was published on the 9th of January, 1958, and was to come into effect from the 10th of January, 1958. The steps necessary under sections 68F, 68G and 68H of the Act to put the scheme into force were taken by this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding road transport service though only in a part of the State, and was carried on by the State Government of Andhra Pradesh. Therefore, the Road Transport Department of Andhra Pradesh became the State Transport Undertaking under the definition in Is. 68A. The fact that this undertaking which came in existence by virtue of the definition on the 15th of February, 1957, was at that time providing road transport services only in a part of the State, would not make it any the less a State Transport Undertaking within the meaning of that term and there is nothing in Chapter.IV-A, which precludes a State Transport Undertaking, which is for the time being providing transport services in a part of the State, from extending its activities and framing a scheme for other parts of the State. I am, therefore, of opinion that a State Transport Undertaking was in existence in November, 1957, when the scheme was prepared and published, and it was the Road Transport Department of Andhra Pradesh. Re. (2). The contentions on this head are two-fold. In the first place, it is urged that the General Manager, who acted for the State Transport Undertaking had no authority to do so on its behalf This is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run and operated by the State Transport Undertaking. The actual words used in the notification are these:- In exercise of the powers conferred by s. 68C of the Motor Vehicles Act, 1939, it is hereby proposed, for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest, to operate the following transport service as per the particulars given below with effect from a date to be notified by the Government. No doubt, the words that the State Transport Undertaking is of opinion are not expressly to be found in this notification ; but at the same time it is impossible that a proposal like this should be prepared and published on behalf of the State Transport Undertaking without its forming an opinion that it was necessary in the public interest to do so. I am of opinion that the State Transport Undertaking must have formed the opinion necessary under s. 68C before it published its proposal and invited objections to the same. There 175 no exact form of words provided for this purpose, and it would be quite in order to draw the inference from the words used in the notification that it was published after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and (ii)that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially. In other words, while the presence of two parties besides the deciding authority will prima facie and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi-judicial act if the authority is nevertheless required by the statute to act judicially. Now, it may be mentioned that the statute is not likely to provide in so many words that the authority (1) [1950] S.C.R. 621. giving the hearing is required to act judicially; that can only be inferred from the express provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d properly coordinated road transport service. The argument continues that if the State Government comes to that conclusion, the complete exclusion which the scheme provides ipso facto follows, and the State Government has not to decide the matter of exclusion as a separate issue. In other words, the argument is that the State Government is not to decide between the competing claims of citizens providing transport privately and the State Transport Undertaking providing transport to the exclusion of citizens, and there is, therefore, no real lis in this case. It is also pointed out that objection can not only be filed by the bus operators of that area who are to be excluded but also by anybody who is affected by the scheme, including the members of the travelling public. Giving, my best consideration to the arguments on either side on this aspect of the matter, I have come to the conclusion that the scope of the hearing before the State Government is of a limited character, though the decision may affect citizens providing transport, the question whether private citizens should or should not be allowed to provide transport is really not a matter in issue before the State Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the New Towns Act, 1946, the Minister prepared a draft order for a new town and caused it to be published, and notices were given to the persons affected. Thereafter objections were received from a number of persons who were the owners and occupiers of dwelling-houses and lands in the affected area. The Act provided that on receipt of the objections, an inspector was to hold a public local inquiry into the objections and make a report to (I) [1950] S.C.R. 621. (2) [1948] A.C. 87. the Minister. Thereupon, the Minister made the order under the Act. These proceedings, as provided by the Act, were taken with respect to a place called Stevenage in 1946 and the Minister passed the necessary order eventually. Some of the owners and occupiers of dwelling-houses and lands situate at Stevenage applied to the Court to have the order quashed, on the ground, among others, that the requirements of the said Act had not been complied with and the interests of the appellants had been substantially prejudiced. According to them, the New Towns Act, 1946, impliedly required that the objections of the appellants should be fairly and properly considered by the Minister and that the Minister should g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion whether the State Government was acting quasi-judicially when deciding objections under s. 68D(2). I may also in this connexion refer to Nagendra Nath Bora v. Commissioner of Hills Division (2), where it was held by this Court that the question whether or not an administrative body or authority functions as purely administrative or in a quasi-judicial capacity, must be determined in each case on an examination of the relevant statute and rules framed thereunder. Similar was the view expressed by this Court in Express Newspapers Ltd. v. The Union of India (3), when considering the functions performed by a wage Board, and it was observed that whether the wage Board exercised judicial or quasi-judicial functions is to be determined by the relevant provisions of the statute incorporating it and it would be impossible to lay down any universal rule which would help in the determination of this question. Applying, therefore, the principles laid down by this Court in these cases and taking into account the express provisions contained in Chapter IV-A and the Rules framed thereunder, the conclusion at which I arrive is that the hearing under s. 68D(2) was not before a quasi-judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in order to comply with the provision of Chapter IV-A and Rule 10, even though there is no provision in the Rules of Business for oral hearing by the Minister or the Secretary. It is urged by Mr. Nambiar that the order passed by the Chief Minister in this case that the hearing should be given by the Home Secretary was not a standing order but an order in this particular case. That seems to me to be correct ; but the question is whether, when an administrative hearing of this nature is being given under a rule which provides that the State Government should give a hearing to objectors, it is necessary that the Minister who decides must also hear. It seems to me that where the hearing is administrative, it is not essential that the Minister must hear, so long as a hearing is given by an officer of the Government. I may in this connexion refer to article 154 of the Constitution, which provides that the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. This being an administrative hearing comes within the executive power of the State and there would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the hearing by the Secretary was sufficient compliance of rule 10, which required a personal hearing before the decision of the objections. The second ground of attack under this head is that in any case the Home Secretary who was also in charge of the Road Transport Department was not the right person to hear the objections on the ground that the scheme was put forward by his department. Here again the fact that the hearing was of an administrative nature has to be borne in mind. Bearing that in mind and also considering that it was the Chief Minister who finally decided the matter and approved the scheme, it cannot be said that the Home Secretary in charge of the Transport Department was an improper person to give the hearing. After all, the scheme was put forward as a proposal. It was open to approval or modification after hearing the objections. The body which put forward the scheme was the State Transport Undertaking which was a limb of the Government. The Government has in a case of this kind to hear objections against a scheme prepared by one of its own limbs. In these circumstances, if the Head of the Department, namely, the Secretary hears the oral objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut it nowhere says that the scheme which was to bring about the exclusion into effect had already been approved. I may again in this connection refer to Franklin s case (ibid), where also an argument was raised that the Minister was biased so far as any consideration of the draft order was concerned, as he had said in an earlier speech that he would make the said order. It was held that as the Minister had no judicial or quasi-judicial duty imposed on him, consideration of bias in the execution of this duty was irrelevant, the sole question being whether or not he genuinely considered the report and the objections. In the present case also, the sole question was whether the objections to the scheme were genuinely considered. If after genuine consideration they were approved, complete exclusion would follow. Simply because the Chief Secretary said that the Government had decided to nationalise road transport in Krishna District, it did not follow that the Government was not prepared to consider fairly the objections to the scheme on the approval of which nationalisation would follow through complete exclusion. Considering, therefore, that the hearing before the State Government unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is true that there is nothing in Chapter IV-A of the Act which provides for succession of one kind of undertaking as defined in s. 68A(b) by another kind of undertaking as defined therein, but when in fact it happens that the Road Transport Corporation is ordered under s. 34 of the Road Transport Corporation Act to take over everything from the Road Transport Department, there is no reason why it should not be considered to be the successor of the Road Transport Department which was at that time the State Transport Undertaking. If the Road Transport Corporation is thus a successor of the State Transport Undertaking from the 11th of January, 1958, I do not see why it cannot enforce the scheme which had already been approved at the instance of its predecessor. I can see no sense in requiring the Road Transport Corporation to go through all these steps which had been gone through by its predecessor, except that it would delay the coming into force of the scheme ; probably, the argument has been raised merely for the sake of delay. But I am of opinion that the Road Transport Corporation in this case being the successor of the State Transport Undertaking which got the Scheme prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicial or only administrative in character, must depend upon the terms of the statute law itself, apart from any pre-conceived notions about the functions of a court or other tribunals vested with the duty and jurisdiction to decide controversies as a judicial body, vide Province of Bombay v. Kusaldas S. Advani (1), Nagendra Nath Bora v. Commissioner of Hills Division(2) and Express Newspapers Limited v. Union of India (3). Now, let us see what has been envisaged by the im- (1) [1950] S.C.R. 621. (2) A.I.R. 1958 S.C. 398. (3) A.I.R. 1958 S.C. 578. pugned provisions of Chapter IVA of the Act. The first step in the process is the preparation of a scheme of road transport service by a State Transport Undertaking for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service. Such a scheme may be to the exclusion, complete or partial, of other persons or otherwise. The second step would be to publish such a scheme in the Official Gazette and also in such other manner as the State Government may direct, giving particulars of the nature of the service proposed to be rendered, area or route proposed to be covered and other prescribed part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular class of service, should be run and operated by the State Undertaking, in relation to any area or route or a portion thereof, keeping in view the purpose of providing an efficient, adequate, economical and properly coordinated road transport service. It is for the State Transport Undertaking to prepare a scheme in furtherance of its determination in favour of such a service, and to publish the same in the Official Gazette and elsewhere, with a view to informing the public, including those who may be affected by such a scheme. (2) Objections to such a scheme may be taken by parties interested, but such objections are not claims. (3) The State Government is authorized to decide the question whether the proposed scheme should be approved or modified, after hearing the parties or their representatives in support of their objections to the scheme. As the objections have to be directed to the merits of the scheme proposed by the State Transport Undertaking, there is no question of any lis between conflicting claims. (4) No particular person or body of persons in the Governmental hierarchy of officers, has been designated as the Authority to hear the objections and to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under s. 68-D(2) is not of a judicial character (using it in the comprehensive sense, including quasi-judicial , which expression has not been approved by high judicial authorities), is that no objective tests have been laid down in Chapter IV-A with reference to which, the determination has to be arrived at. The expressions efficient , adequate , economical , properly coordinated and public interest , are matters of opinion and policy as s. 68-C itself indicates, and do not lay down any objective tests. If I am right in that conclusion, there cannot be any question of evidence forthcoming in proof of something which is subjective to the authority determining that matter. A very fundamental consideration in this connection, is whether ss. 68-C and 68-D contemplate any lis. In other words, what is the proper scope and ambit of the inquiry envisaged by those sections ? The scheme prepared and published in accordance with s. 68-C, by a State Transport Undertaking, is placed before the public only after the Undertaking has reached the conclusion that it is necessary in the public interest. After the scheme has been prepared and published as aforesaid, the objections to be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of providing road transport services-and that the Government is the third party, which is the arbitrator between the two contesting parties. That, in my opinion, is not a correct reading of the provisions of Chapter IV-A of the Act. The whole aim and object of that Chapter is to replace individual businessmen engaged in that trade, by nationalised road transport services which are meant to be run in the interest of the community as a whole, and thus to serve the best public interest. The Government is as much interested in the scheme as the Road Transport Undertaking which is a creature and a limb of the Government, brought into existence with a view to implementing the policy of the Government to provide nationalised road transport services. That being the whole scheme of the policy of nationalisation, it is not correct to represent the State Transport Undertaking as entering into competition with other individuals or incorporated bodies whose business it is to provide the same kind of transport facilities. That is made clear by the provisions of s. 68-F, which, as indicated above, make it obligatory on the Regional Transport Authority to issue permits as applied for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. It has been held and it may be taken as well-settled that when there is a competition between a number of applicants for a particular route for supplying road transport service, the Regional Transport Authority or any other Authority deciding between those conflicting claims, has to determine the matter in a quasijudicial way, because they are determining questions affecting the rights of individuals. But in the proceeding before the State Government, no such rival -claims have to be decided upon. What has to be determined is whether the proposed scheme will serve public interest. Thus, in proceedings under Chapter IV of the Act, individual claims have to be decided upon, whereas under Chapter IVA, it is the collective interest of the community as a whole, which is the subjectmatter of determination by the State Government. In other words, the proposed scheme is the outcome of the decision by a limb of the State Government (State Transport Undertaking), which has come to the conclusion that it is in the public interest that road transport service should be run and operated by the State. The calling of objections by persons affected by the scheme, is not with a view to decidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfied that it is requisite, for the purpose of dealing satisfactorily with extensive war damage in the area of a local planning authority, that a part or parts of their (I) [1947] 1 All E.R. 851, 853, 854. area, consisting of land shown to his satisfaction to have sustained war damage or of such land together with other land contiguous or adjacent thereto, should be laid out afresh and redeveloped as a whole, an order declaring all or any of the land in such a part of their area to be land subject to compulsory purchase for dealing with war damage may be made by the Minister if an application in that behalf is made to him by the authority before the expiration of five years from such date as the Minister may by order appoint as being the date when the making of such applications has become practicable. A part of the area of a local planning authority as to which the Minister is satisfied as aforesaid is in this Act referred to as an area of extensive war damage . Lord Greene, M. R., who delivered the leading judgment of the Court of Appeal, reversing that of Henn Collins, J. thus summarized the procedure laid down in the Act :- The procedural provisions in connection wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons interested consent. In the case of Phoenix Assurance Co., Ltd. v. Minister of Town and Country Planning (1), Henn Collins, J. considered the nature of the order to be passed under s. I (I) of the Town and Country Planning Act, 1944, and came to the conclusion that the Minister s function was of a quasijudicial character. He followed that decision in the case which came up before the Court of Appeal in Robinson v. Minister of Town and, Country Planning (2). The Court of Appeal reversed the decision of the learned Judge, and did not approve of his decision in Phoenix Assurance Co., Ltd. v. Minister of Town and Country Planning (1). In the course of his judgment, Lord Greene, M. R., observed as follows at page 859:- It is the case of an original order to be made by the Minister as an executive authority who is at liberty to base his opinion on whatever material he thinks fit, (I) [1947] 1 All E.R. 454. (2) [1947] 1 All E. R. 851, 853, 854. whether obtained in the ordinary course of his executive functions or derived from what is brought out at a public inquiry if there is one. To say that, in coming to his decision, he is in any sense acting in a quasi-judicial cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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