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1971 DIGILAW 558 (ALL)

State of Uttar Pradesh v. Harish Chandra

1971-12-09

GOPI NATH, S.K.VERMA

body1971
JUDGMENT Verma, C. J.-These are 36 connected special appeals against the judgment of a learned Single Judge of this Court, in 36 connected writ petitions. The respondents in these appeals are operators of transport services. Most of them belong to the State of Rajasthan and some of them are bus operators of Uttar Pradesh. The State Transport Undertaking of Uttar Pradesh framed four schemes for four routes :- (i) Mathura-Alwar, (ii) Mathura-Kama-Kosi, (iii) Agra-Dholpur, (iv) Agra-Bharatpur. 2. The four notifications in respect of all the four schemes were published in the U.P. Gazette. Copies of the notifications were also sent to Rajasthan for being pasted on the notice board of the transport authorities in Rajasthan. Some of the private bus operators filed objections. After disposing of these objections, the schemes as finally approved by the State Government, were published in the U.P. Gazette and notifications were also put up on the notice board of the transport authorities in Rajasthan. The schemes, though proposed by the State Transport Undertaking of Uttar Pradesh (hereinafter referred to as the `Undertaking'), received the concurrence of the State of Rajasthan. Put briefly, what the schemes did, was to exclude all private bus operators on the aforesaid routes. The schemes provided that only buses belonging to the Undertaking of Uttar Pradesh and Rajasthan would ply their buses on the aforesaid routes. By consequent notifications, the permits held by the respondents were cancelled under Sec. 68-F of the Motor Vehicles Act (hereinafter referred to as the `Act'). 3. The validity of the notifications was challenged by means of the writ petitions out of which these appeals have arisen. The learned Single Judge who heard the writ petitions, came to the conclusion that a State could not, legally, by taking unilateral action, provide transport services for a territory outside the limits of its own territory. He was of the view that in framing the schemes, the Undertaking really performed the executive functions of the State. He relied upon Article 162 of the Constitution which reads as follows : 162. He was of the view that in framing the schemes, the Undertaking really performed the executive functions of the State. He relied upon Article 162 of the Constitution which reads as follows : 162. "Subject to the provisions of this Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws : Provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made by Parliament upon the Union or authorities thereof." 4. According to the learned Single Judge, the executive power of a State not have extra territorial operation, though he was conscious of the fact that the scheme as finally approved and published was `law' as held by their Lordships of the Supreme Court in H.C. Narayanappa v. State of Mysore, A.I.R. 1960 SC 1073 at page 1079. Their Lordships observed as under : - "In any event, the expression law' as defined in Article 13 (3) (a) includes any ordinance, order, bye-law, rule, regulation, notification, custom etc. and the scheme framed under Sec. 68 C may properly be regarded as law' within the meaning of Article 19 (6) made by the State excluding Private operators from notified routes or notified areas, and immune from the attack that it infringes the fundamental right guaranteed by Article 19 (1)(g)." 5. The learned Single Judge held, further, that one State could not cancel the permits held by the bus Operators of another State. The further finding of the learned Single Judge was that effective notice was not given to the bus operators of Rajasthan as the notifications were published in the Gazette of Uttar Pradesh only. On the findings briefly summarised by us, the learned Single Judge allowed the writ petitions and quashed the notifications mentioned above. Hence these appeals by the State of Uttar Pradesh and the Regional Transport Authority through. the Regional Transport Officer, Agra. 6. Chapter IV-A was added to the Act by Section 62 of Act No. 100 of 1956. On the findings briefly summarised by us, the learned Single Judge allowed the writ petitions and quashed the notifications mentioned above. Hence these appeals by the State of Uttar Pradesh and the Regional Transport Authority through. the Regional Transport Officer, Agra. 6. Chapter IV-A was added to the Act by Section 62 of Act No. 100 of 1956. Sec. 68-A (b) of the Act defines `State transport undertaking' as follows :- (b) "`State transport undertaking' means any undertaking providing road transport service, where such undertaking is carried on by- (1) the Central Government or a State Government; (ii) any Road Transport Corporation established under Sec. 3 of the Road Transport Corporation Act, 1950; (iii) the Delhi Road Transport Authority established under Sec. 3 of the Delhi Road Transport Authority Act, 1950; (iv) any municipality or any corporation or company owned or controlled by the State Government." Sec. 68-B provides that Chapter IV-A is to override Chapter IV of the Act and other laws. The important section are Secs. 68-C and 68-D which are reproduced below :- 68-C. "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-ordinated road. transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking. whether to the exclusion, complete or partial, of other persons or otherwise, the State Transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be recovered and such other particulars respecting thereto as may be prescribed, and shall cause every scheme to be published in the Official Gazette and also in such other manner as the State Government may direct." 68-D. " (1) Any person affected by the scheme published under Sec. 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. (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-sec. (2) shall then be published in the Official Gazette by the State Government and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route : Provided that no such scheme which relates to any inter-State route shall be deemed to be an approved scheme unless it has been published in the Official Gazette with the previous approval of the Central Government." 7. There is not the slightest doubt that these sections confer power upon a State to frame a scheme which will have operation within the State. The question that arises for consideration is whether these sections confer power upon a State to frame a scheme in respect of an inter-State route. An inter-State route is one of which one of the termini falls in one State and the other in another State (See B.H. Aswathanarayana Singh, etc. v. The State of Mysore, A.I.R. 1965 SC 1848, p. 16. It is not disputed that the impugned schemes relate to inter-State routes. In our opinion, Article 162 of the Constitution is not decisive of the questions that arise in these appeals. The Article no doubt says that the executive power of the State shall extend to matters with respect to which the legislature of the State has power to make laws. The Article nowhere deals with any territorial limits. Article 298 confers upon the Union and each State the executive power to carry on any trade or business and to acquire, hold and dispose of property and to make contracts for any purpose. It is thus quite obvious that carrying on any trade or business or the acquisition of property or the making of contracts is in the exercise of executive power. Can it seriously be contended that one State cannot carry on trade or acquire property in another State? Almost all the States have property and emporia in Delhi. It is thus quite obvious that carrying on any trade or business or the acquisition of property or the making of contracts is in the exercise of executive power. Can it seriously be contended that one State cannot carry on trade or acquire property in another State? Almost all the States have property and emporia in Delhi. Article 162 of the Constitution, therefore, does not impose any territorial limits upon the exercise of executive power by a State. The relevant Articles are 245 and 258. Article 245 reads as follows :- 245. " ( 1 ) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. 7 (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation." Article 258 reads as follows : 258. " (1) Notwithstanding anything in this Constitution, the President may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends. (2) A law made by Parliament which applies in any State, may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof. (3) Where by virtue of this article powers and duties have been conferred or imposed upon a State or officers or authorities thereof, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of any extra Court of administration incurred by the State in connection with exercise of those powers and duties." 8. The right of a private citizen to carry on the business of plying buses on hire can be taken away without payment of compensation under Article 19(6) of the Constitution, but it can be done only by making a `law'. The right of a private citizen to carry on the business of plying buses on hire can be taken away without payment of compensation under Article 19(6) of the Constitution, but it can be done only by making a `law'. As we have noticed above, such a scheme is a `law' within the meaning of Article 13 of the Constitution. The argument on behalf of the respondents is that Article 258 (2) confers only executive powers and not the power to make a law which could be extra-territorial in operation. In Jayantilal Amritlal Shodhan v. F.N. Rana, A.I.R. 1964 SC 648, the majority view was expressed thus :- The plea about the placing of Article 258 in Chapter II and the character of the two preceding Articles as indicative of the character of the powers conferred by Art 258 (1) is not at all decisive; for clause (2) of Article 258, and clause (3) of Article 261, which occur in Chapter II, deal with matters legislative and judicial. At this stage Article 258 may be set out : "(1) Notwithstanding anything in this Constitution, the president may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends. (2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorities the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof." (3) Where by virtue of this article powers and duties have been conferred or imposed upon a State or officers or authorities thereof, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of any extra costs of administration incurred by the State in connection with the exercise of those powers and duties." By the first clause, the President authorised to entrust with the consent of the State Government, to that Government, or its officers functions in relation to any matter to which the executive power of the Union extends. Clause (2) deals with the exercise of legislative authority of Parliament in matters exclusively within its competence to confer powers and impose duties upon the State or officers and authorities thereof. Clause (3) provides for payment of sums determined in the manner prescribed by the Union for the burden of extra costs incurred by the State in connection with the performance of duties and exercise of powers conferred or imposed by virtue of Article 258. The High Court held that the entrustment of functions under Article 258(1) did not fall within the executive power of the Union. In view of the High Court functions which were not judicial or legislative would not necessarily be regarded as executive and that certain functions which did not fall within the three recognised categories legislative, judicial and executive, may be placed in the category of miscellaneous functions. But it is now well settled that functions which do not fall strictly within the field legislative or judicial, fall in the residuary class and must be regarded as executive." 9. Clause (2) of Article 258, therefore, provides for conferment of powers, executive, legislative and judicial. In other words, it is open to the Central Government to perform its functions through a State and its agencies. In Messrs. Mount Corporation v. Director of Industries and Commerce in Mysore, Bangalore, A.I.R. 1965 Mysore 143, a Division Bench of the Mysore High Court observed as follows : "Unlike in the Constitution of United States of America, where there are two separate sets of officials, namely, Federal officials and states officials, under our Constitution though the field of legislative and executive actions of the Central Government and State Government are demarcated, the Central Government executes several of its functions through officers of the State Government, and when it so does, the officers of the State Government are really discharging the functions of the Central Government and not of the State Government." It is thus clear that the Parliament by adding Chapter IV-A to the Act meant that the functions of the Central Government were to be performed by a State or its agencies, and it cannot be disputed that Parliament has the power to make laws which will have operation throughout the country. In ether words, when the Undertaking proposed the schemes and when the same were approved by the State Government of Uttar Pradesh, the Undertaking and the State Government were really performing the functions of the Central Government under Clause (2) of Article 258 of the Constitution. The learned Single Judge also observed in his judgment as follows : "On a literal interpretation of Sec. 68-C, it would be possible to contend that the State Transport Undertaking of Uttar Pradesh could frame a scheme for operating its transport services and excluding others in, for example, the State of Mysore and operate it after its scheme had been notified under Sec. 68-C and approved under Sec. 68-D in Uttar Pradesh only, because Sec. 68-C authorises the framing of a scheme by `any' State Transport Undertaking for `any area or route' in the country." He, however, excluded that possibility by observing : "It can be safely presumed that Parliament never intended to confer such unreasonably wide powers upon State Transport Undertakings which would not only run counter to Article 162 of the Constitution but could be used to unreasonably restrict fundamental rights of citizens by proceeding in one State without notice to those in another State whose rights are affected." With great respect, we do not agree. If Parliament intended to confer such wide powers and there is no constitutional or other impediment, it could do so and has, in fact, done so by adding Chapter IV-A to the Act. We are, therefore, of the opinion that the schemes and notifications cannot be impugned on the ground that they have extra territorial operation. 10. We shall now deal with the argument that Undertaking of Uttar Pradesh or the State of Uttar Pradesh could not validly cancel permits held by bus operators of Rajasthan. This argument is really based on a misconception of correct facts. Sec. 63 (1) of the Act reads as follows :- 63 (1) ."Except as may be otherwise prescribed, a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region, unless the permit has been conutersigned by the Regional Transport Authority of that other region, and a permit granted in any one State shall not be valid in any other State unless countersigned by the State Transport Authority of that other State or by the Regional Transport Authority concerned." 11. The bus operators of Uttar Pradesh held permits granted by the transport authorities of Uttar Pradesh. They could, however, not legally ply their vehicles on hire in Rajasthan beyond the limits of Uttar Pradesh without first having their permits counter-signed by the transport authorities of Rajasthan. What really happened was that when the schemes were finalized, the permits of the operators of Uttar Pradesh were cancelled by the transport authorities of Uttar Pradesh and the counter-signatures made by the transport authorities of Rajasthan were cancelled by those transport authorities. Similarly, the permits held by those operators of Rajasthan were cancelled by the transport authorities of Rajasthan and the counter-signatures on those permits made by the transport authorities of Uttar Pradesh were cancelled by these transport authorities. We, therefore, find no substance in this argument advanced on behalf of the respondents. 12. As regards the question of adequacy or otherwise of notice to the respondents, Sec. 68-C and 68-D provide for publication in the official gazette of the State. This provision was complied with and the notifications were published in the official gazette of the State of Uttar Pradesh. Sec. 68-C further provides, "and also in such other manner as the State Government may direct. Rule 4 of the U.P. State Road Transport Services (Development) Rules, 1958, provides :- 4. "Publication of the Scheme under Sec. 68-C. (2) A scheme framed under Sec. 68-C of the Act shall be published in Form I appended to these Rules. (2) The Transport Commissioner shall cause a copy of the scheme to be pasted on the notice board of the office of the State Transport Authority and another at the office of the Regional Transport Authority concerned." It is not disputed that this Rule was complied with. The notices were put up on the notice board of the State Transport Authorities of Uttar Pradesh and also of Rajasthan. We should also like to add that the bus operators of Rajasthan plied their buses between one terminus in Rajasthan and the other terminus in the State of Uttar Pradesh. It is impossible to believe that they had no knowledge of the schemes which they sought to impugn. 13. We should also like to add that the bus operators of Rajasthan plied their buses between one terminus in Rajasthan and the other terminus in the State of Uttar Pradesh. It is impossible to believe that they had no knowledge of the schemes which they sought to impugn. 13. An argument, not made before the learned Single Judge on behalf of the respondents, has been made before us, and it is based on the words "such scheme which relates to any "inter-State route", in the proviso to Sec. 68-D (3) of the Act. The contention is that the words "which relates to" mean a scheme which has some connection with or concerns "an inter-State route" and that these words do not contemplate the creation or the establishment of an inter-State route. The argument is, in our view, fallacious. If this argument were to be accepted, the proviso would be rendered completely nugatory, for in almost every case parts of an inter-State route will be within the territory of one or more States. We shall illustrate this by an example. A route from Allahabad to Delhi is obviously an inter-State. The route between Allahabad and Ghaziabad is within the State of Uttar Pradesh. If the Undertaking of Uttar Pradesh decides to nationalise the route between Allahabad and Ghaziabad, it can do so without any reference to the Central Government and without any approval of the Central Government, otherwise for the nationalisation of every route, which is entirely within the State. but is Part of an inter-State route, will require the approval of the Central Government which obviously could not have been the intention of the Legislature. As we have stated above, the interpretation sought to be put upon the proviso by the learned counsel for the respondents would render the proviso completely nugatory. In our view, the proviso does contemplate the creation or the establishment of an inter-State route. This has been made clear by the observations of a Division Bench of Mysore High Court in M.S. Sadananda v. State of Mysore, A.I.R. 1969 Mysore 319, which run as under :- "The expression such scheme which relates to an `inter-State route' occurring in the proviso should be understood in the same way in which it has been defined in sub-sec. (3), and when we do so, it becomes clear that the relationship between a scheme and an inter-State route exists only when that inter-State route is a notified route in the sense that part of that notified route lies in one State and the remainder in another. If, however, the notified route is entirely within a single State, the scheme cannot relate to an inter-State route. So, the proviso has application only to a case where the nationalisation extends to that part of the route which is outside one State and lies in another. In that event that inter-State route becomes a notified route and the scheme would be one which relates to an inter-State route; otherwise not." 14. We, therefore, do not find it possible to agree with the learned Single Judge that the notifications and the schemes are invalid. 15. In consequence, we allow these appeals, set aside the order of the learned Single Judge and hold that the impugned schemes and notifications are valid in law. The learned Single Judge has said in his judgment that individual petitioners had raised some additional and separate grounds for questioning their exclusion from certain routes. He, however, felt that it was not necessary to consider individual cases of petitioners as all the writ petitions could be decided on general grounds common to all the petitions emerging from admitted facts. These individual grounds must now be considered by the learned Single Judge. He, however, is no longer available in this Court and the papers of these cases will be laid before the Hon'ble the Chief justice for nominating a Bench. 16. Of these appeals, parties will bear their own cost.