Shri Roshanlal Gautam Vs. State of
Uttar Pradesh & Ors  INSC 234 (26 October 1964)
26/10/1964 HIDAYATULLAH, M.
GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N.
DAYAL, RAGHUBAR MUDHOLKAR, J.R.
CITATION: 1965 AIR 991 1965 SCR (1) 841
R 1974 SC1940 (11)
Nationalisation of Transport Services--Scheme
prohibiting private operators from specified routes-Whether affects rights of
operators holding permits related not to routes but to specified area-Scheme
whether satisfies provisions of statute-Services provided under scheme whether
adequate- Section 68C Motor Vehicles Act, 1939 as amended by Motor Vehicles
(Amendment) Act, 1956.
The appellant, the holder of a permit in
respect of contract carriages in the Agra region challenged a scheme framed by
the Uttar Pradesh Government nationalising road transport services in the Agra
region and prohibiting private operation of the services on, certain specified
routes. His writ petition before the High Court having been dismissed and
Letters Patent Appeal also having failed he appealed to the Supreme Court, by
Three contentions were advanced on behalf of
the appellant :
(1) The scheme was only a reproduction of an
earlier scheme under A. 3 of the U.P. Road Transport (Development) Act, 1955
which had been struck down by the High Court. The requirements of s. 68C of the
Motor Vehicles Act were quite different from those of s. 3 of the U.P. Act, and
the scheme did not answer them. (2) Under s. 68C of the Motor Vehicles Act the
State was under an obligation to provide 'adequate' transport services to
replace those already in operation, but the scheme provided only for 16
contract carriage services. As the number of these services could be changed
under the scheme, the latter would be again open to challenge whenever the
change was effected. (3) The scheme was not properly framed because it provided
for the operation of contract carriages on certain routes to the exclusion of
the appellant who held a permit for an area irrespective of any route or
HELD : The appeal must be dismissed.
(i) It is no doubt true that while s. 68C
makes a mention of an "efficient, adequate, economical and properly
coordinated road transport service" "in the public interest",
the U.P. Act merely mentioned "the interest of the general public"
"sub serving the common good or for maintaining and developing efficient
However it would be wrong to think that even
under the U.P. Act Government would not think of an "adequate",
"economical" or "property coordinated" road transport
services for the common good and for maintaining and developing an efficient
road transport system. The change in the language is no doubt there but the
intention underlying the words is the same, and even if the exact words of s.
68C might not have been present before the framers of the scheme, it is quite
obvious that they took into account those very factors. Indeed the use of the
words "adequate State road transport contract carriage service" in
cl. (3) of the scheme reproduced the language of s. 68C and not that of s. 3.
This suggests that the requirements of s. 68C were probably borne in mind. [845
B- F] 842 (ii) The scheme was read as providing sixteen contract carriages and
it was not considered whether it would become inadequate in the future. [84 A]
(iii) Under the Motor Vehicles Act there is no doubt a distinction between area
and route in some of the sections but in others that distinction does not seem
to be preserved. The provisions of s. 51(2) (i) clearly show that the area at
the commencement of the permit can be cut down by notifying certain routes and
there seems to be no bar to doing it later in view of the scheme of
nationalisation. By taking away one of the routes the area is as effectively
cut down as when an area is included in the permit but routes are indicated on
which alone the contract carriages can play.
The provisions of s. 68B also indicate that
power is reserved to modify the existing permits either by curtailing the area
or by curtailing the routes. Taking over of certain routes exclusively for the
State undertakings renders that portion of the area ineffective for a private
operator such as the appellant who holds the permit for the whole area
including those routes. [848 B-G] C.P.C. Motor Services, Mysore v. State of
Mysore, [19621 Supp. 1 S.C.R. 717, Kondala Rao v. A. P. State Road Transport
Corporation, A.I.R. (1961) S.C. 82 and Dosa Satyanarayanamurty etc. v. Andhra
Pradesh State Road Transport Corporation,  1 S.C.R. 642, relied on.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 800 of 1964.
Appeal by special leave from the judgment and
order dated March 30, 1964, of the Allahabad High Court in Special Appeal No.
27 of 1964.
G. S. Pathak, B. L. Singhal and B. P.
Maheshwari, for the appellant.
C. B. Agarwala, K. N. Singh and O. P. Rana,
for the Respondents.
G. S. Pathak, A. V. Viswanatha Sastri, B. L.
Singhal and B. P. Maheshwari, for the intervener.
The Judgment of the Court was delivered by
Hidayatullah J. The appellant who appeals by special leave against the judgment
of the High Court of Allahabad dated March 30, 1964 is the holder of a contract
carriage permit granted to him by the Regional Transport Authority, Agra and
valid till February 1, 1955. He owns a single contract carriage and his permit
covers the whole of the Agra region which comprises the six districts of
Mathura, Agra, Aligarh, Etah, Etawah and Mainipuri. No special route or routes
are indicated in his permit and the terminal of his operation are the frontiers
of this region on all sides. In 1955, the Government of Uttar Pradesh,
purporting to act under S. 3 of the U. P. Road Transport Services (Development)
Act, 1955, framed a scheme for nationalisation of transport services in Uttar
Pradesh. The scheme which was then 843 framed was struck down by an order of
the High Court of Allahabad on the petition of some private operators. In 1955,
the Motor Vehicles Act, 1939 was amended by the introduction of Chapter IVA
dealing with special provisions relating to State Transport Undertakings. This
amendment was introduced by the Motor Vehicles (Amendment) Act, 1956 with
effect from February 16, 1957. After the amending Act the scheme was
reconsidered by the State Government and action was taken under Chapter IVA to
notify it under s. 68C of the Motor Vehicles Act. In this scheme 56 routes,
which were mentioned by name, were removed from the operation of contract
carriage permits issued to private operators in the Agra region and Government
announced' that adequate State Road Transport contract carriage services would
be provided on those routes or portions thereof. The functioning of transport
services other than those put by the State Road Transport Services was
prohibited on all those routes. The private operators objected again but their
objections were over-ruled and the scheme was published in the Gazette on
October 17, 1959. A writ petition (Civil Miscellaneous Writ Petition No. 26622
of 1959) was filed by the appellant and others objecting to the scheme on various
grounds. This was allowed on February 1, 1962 by Mr. Justice Oak who set aside
the scheme and remanded it for reconsideration in the light of his order. The
scheme was not struck dawn in full but only partially in respect of the
petitioners in the High Court. It was ordered, however, that the State
Government would be at liberty to enforce the scheme in other respects.
The main reason for striking down the scheme
in respect of those petitioners was that their objections were not considered
and they were not given a reasonable opportunity to produce evidence in support
of their objections.
After remand objections were considered and
an order was passed by the Legal Remembrance on October 18, 1963 by which the
scheme was reaffirmed over-ruling the objections. The only change made was that
instead of the provision of "adequate" contract carriage service by
the State Road Transport Contract Carriage Services it was provided that "
1 6 contract carriage services or more or less in accordance with the need from
time to time" would be provided on the routes or portion thereof which
were notified. The appellant filed a petition in the High Court challenging the
scheme. It was heard by Mr. Justice Broome and rejected by him on March 17,
1964. The appellant then filed a special appeal under the Letters Patent
against the decision of Mr. Justice Broome. The High Court by the impugned
order 844 dismissed it "summarily" though it passed a fairly detailed
order. It is against the order that the present appeal has been filed.
The first contention of Mr. G. S. Pathak is
that although the scheme purports to be under s. 68C of the Motor Vehicles Act,
the requirements of that section were not borne in mind inasmuch as the scheme
framed under s. 3 of the U.P. Act was without any change approved and notified
after the successive remands by the High Court. It is therefore necessary to
see how far the two provisions differ in their requirements. Section 3 of the
U.P. Act laid down the power of the State Government to run Road 'Transport
Services as follows :- "3. Power of the State Government to run Road
Transport Services.- (1) Where the State Government is of the opinion that it
is necessary in the interests of the general public and for sub serving the
common good, or for maintaining and developing efficient road transport system
so to direct, it may, by notification in the official Gazette declare that the
road transport services in general, or any particular class of such services on
any route or portion thereof as may be specified, shall be run and operated
exclusively by the State Government, or by the 'State Government in conjunction
with railways or be run and operated partly by the State 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." Section 68C of
the Motor Vehicles Act provided as follows:- "68C. Preparation and
publication of scheme of road transport service of a Slate Transport
Where any State transport undertaking is of
opinion that for the purpose of providing an efficient, adequate. economical
and properly coordinated 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 845 the nature of the
services proposed to be rendered, the area or route proposed be covered and
such other particulars respecting thereto as may be prescribed, and shall cause
every such scheme to be published in the Official Gazette and also in such
other manner as the State Government may direct." It is contended that the
requirements of the former section which were the conditions precedent for
action are not the same as the requirements of s. 68C. It is no doubt true that
while s. 68C makes a mention of an "efficient, adequate, economical and
properly coordinated road transport service" "in the public
interest" the U.P. Act merely mentioned "the interest of the general
public" " subserving the common good or for maintaining and
developing efficient road transport system." The change of verbiage,
however, does not make a change in the requirements. It would be wrong to think
that even under the U.P. Act Government would not think of an 'adequate',
'economical' or 'properly coordinated' road transport service when it chose to
provide road transport services for the common good and for maintaining and
developing efficient road transport system.
The change in language is no doubt there but
the intention underlying the words is the same and even if the exact words of
s. 68C might not have been present before the framers of the scheme, it is
quite obvious that they took into account those very factors. Indeed, the use
of the words "adequate State road transport contract carriage service"
in cl. (3) of the scheme framed and notified in 1959 reproduces the language of
s. 68C and not that of s. 3. This suggests that the requirements of s. 68C were
probably borne in mind.
Even if they were not and only the
requirements of the U.P.
Act were borne in mind, we find no difficulty
in holding that as the requirements are basically the same, the exercise of
power must be referred to s. 68c under which it has validity, and not to s. 3
of the U.P. Act. This ground of objection was rightly over-ruled by the High
It was next contended that the provision of
"16 contract carriages or more or less' under cl. (3) of the present
scheme does not carry out s. 68C either in spirit or in terms. Section 68C
requires 'adequate' services to be maintained and the fixing of 16 carriages in
advance, it is said, does not carry out the purpose of that provision. It is
also contended that as this number is likely to be changed the scheme itself
would be open to challenge when- ever the number is less than the adequate number
It may be pointed out that on the former
occasion the provision 846 about 'adequate' carriages was challenged as too
vague. It is because of that challenge that the number of carriages is now
shown and it is provided that this number may be more or less as the occasion
demands. We read the scheme as providing sixteen contract carriages. We need
not consider whether it would become inadequate in the future. At the moment it
is stated that 16 carriages will be provided and it is not affirmed that this
number is in any way inadequate.
The last contention is the most serious of
all. It is submitted that the scheme is not properly framed because it provides
for the operation of contract carriages on certain routes to the exclusion of
the appellant who holds a permit for an area irrespective of any route or
routes. It is contended that the framers of the scheme have confused between a
stage carriage permit and a contract carriage permit, since the former is
granted for a route or route and the latter only for an area. The argument is
that if State road transport contract carriages were to be provided the scheme
should have indicated an area in which they were to operate and that area
should have been excluded instead of dismembering the area of the appellant by
mentioning the routes. Such a procedure, it is submitted, is contrary to the
scheme of the grant of permits under Chapter IV of the Motor Vehicles Act. On
behalf of the respondent it is submitted that the notification of the 56 routes
curtails the area such as it was and that there is no breach of the provisions
of the Motor Vehicles Act.
Under the Motor Vehicles Act there is no
doubt a distinction between area and route in some of the sections but in
others that distinction does not seem to be preserved. 'These terms-route and
area-were explained in C. P. C. Motor Services, Mysore v. The State of Mysore
and A nr. (1) and it was pointed out that under the scheme of the Motor
Vehicles Act, 1939 these two words sometimes stand for the road on which the
omnibuses run or portions thereof. A similar view was earlier expressed in
Kondata Rao v. A. P. State Road Transport Corpn. (2) In Dosa Satyanarayanamurty
etc. v. The Andhra Pradesh State Road Transport Corporation("), Subba Rao
I., observed :
"Under s. 68C of the Act the scheme may
be framed in respect of any area or a route or a portion of any area or a
portion of a route.
There is no inherent inconsis- (1)
Supp. 1 S.C.R. 717 (2) A.I.R.
1961 S.C. 82.
(3)  1 S.C.R. 642 at 664.
847 tency between an "area" and a
"route". The proposed route is also an area limited to the route
proposed. The scheme may as well propose to operate a transport service in
respect of a new route from point A to point B and that route would certainly
be an area within the meaning of s. 68C." The argument thus loses a great
deal of its force but there are other reasons too which show that the
contention is misconceived.
By s. 2(3) a contract carriage is defined as
a motor vehicle which carries a passenger or passengers on hire or reward under
a contract from one point to another without stopping to pick up or set down
along the line of that route passengers not included in the contract. A stage
carriage is defined as a motor vehicle carrying or adopted to carry passengers
for hire or reward at separate fares paid for the whole journey or for stages
of the journey. The distinction between the two is this: the contract carriage
is engaged for the whole of the journey between two points for carriage of a
person or persons hiring it but it has not the right to pick up other
passengers en route. The stage carriage on the other hand, runs between two
points irrespective of any prior contract and it is boarded by passengers en
route who pay the fare for the distance they propose to travel. Mr. Pathak
contends that if one examines the scheme of ss. 46 and 49 one finds that the
application for a stage carriage permit is for a route or routes or area or
areas but the application for a contract carriage is only for an area for which
the permit is required. He contends, therefore, that as contract carriages do
not ply on routes a scheme curtailing a contract carriage permit must be for a
part of the area covered by the permit and that it cannot be for a route or
routes. He also refers to s. 68G in which two separate principles and methods
for the determination of compensation for the curtailment of areas and routes
is provided and submits that this also points out that a contract carriage
permit is by an area and not by a route and consequently the indication of the
route on which the carriages of State undertakings would ran is ineffective to
curtail the area of a private operator and the scheme must therefore fail. On
the other hand, it may be pointed out that S. 51(2) of the Motor Vehicles Act
itself provides as follows "51(2) : The Regional Transport Authority, if
it decides to grant a contract carriage permit, may, subject to any rules that
may be made under this Act, attach to 848 the permit any one or more of the
following conditions, namely:- (i) that the vehicle or vehicles shall be used
only in a specified area or on a specified route or routes;
This provision clearly shows that the area at
the commencement of the permit can be cut down by notifying certain routes and
there seems to be no bar to doing it later in view of a scheme of
In our judgment, the argument of the
respondents must be accepted. If under S. 51 (2) (1) a permit for a contract
carriage could be limited to specified route or routes notwithstanding that the
petition for such a permit must be for an area there is no difficulty in accepting
a scheme which cuts down the area by subtracting a few routes. By the taking
over of the routes the area is as effectively cut down as when an area is
included in the permit but routes are indicated on which alone the contract
carriages can ply.
There are two other arguments which support
the contention of the respondents. Under S. 68B the provisions of Chapter IVA
apply notwithstanding anything inconsistent therewith contained in Chapter IV
of the Act. Sections 46 to 49 are in Chapter IV and no inconsistency between a
scheme framed under S. 68C and any provision of Chapter IV can be made a ground
of attack. Secondly, under s. 68F when the permits are issued to a State
transport undertaking for stage carriages or contract carriages it is provided
that the Regional Transport Authority may modify the terms of any existing
permit so as to "curtail the area or route covered by the permit in so far
as such permit relates to the notified area or notified route". This would
indicate that power is reserved to modify the existing permits either by
curtailing the area or by curtailing the routes. The taking over of certain
routes exclusively for the State undertakings renders that portion of the area
ineffective for a private operator such as the appellant who holds a permit for
the whole area including those routes. The High Court was, therefore, right in
holding that by the notified scheme the routes which were mentioned must be
taken to have been subtracted from the area to which the permit applied.
In other words, there is no merit in the
appeal. The appeal fails and is dismissed with costs.