Sindhi Sahiti Multipurpose Transport
Co-Operative Society Vs. State of Madhya Pradesh & Ors  INSC 287 (16
RAY, A.N. (CJ) RAY, A.N. (CJ) BEG, M.
HAMEEDULLAH SINGH, JASWANT
CITATION: 1977 AIR 441 1977 SCR (2) 86 1977
SCC (1) 403
Motor Vehicles Act, 1939 Chapter IV-A, Scheme
under, Whether open to constitutional challenge---S. 68D. objections against
scheme, scope of.
The Government of Madhya Pradesh proposed to
pass scheme No. 9-M; regarding the nationalisation of road transport.
The scheme was approved and notified in the
State Gazette, after the appellant's objections made under section 68D of the Motor
Vehicles Act, 1939, had been heard. The appellant flied a writ petition in the
High Court challenging the Government's rejection of his objections, and also
impeaching the scheme as published in the gazette. The High Court dismissed the
petition holding that, as Chapter IV-A of the Act has been included as Entry
125 in the Ninth Schedule to the Constitution, the scheme cannot be
Dismissing the appeal the Court,
HELD: 1. Though Chapter IV-A of the Act is
not open to any constitutional challenge, it is open to any aggrieved person to
challenge any scheme on the ground that it is not a valid scheme as required by
the provisions of Chapter IV-A of the Act. [87 C-D]
2. Under section 68D of the Act the only
scope for objection is whether the scheme is efficient and adequate and not
whether exclusion is complete or partial. [91 A-B] Objections are confined only
to the four grounds of efficiency, adequacy, economy and proper coordination of
road transport service. There was never any objection to the Scheme on
exclusion related to any of these grounds.
[90 D-E] Capital Multipurpose Co-operative
Society Bhopal and Ors. v. The State of M.P. & Ors.  3 S.C.R. 329, applied.
H.C. Narayanappa & Ors. v. The State of
Mysore & Ors.,  3 SC.R. 742, referred to:
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1166 of 1976.
Appeal by Special Leave from the Judgment and
Order dated the 16th September, 1976 of the Madhya Pradesh High Court in Misc.
Petition No. 1004 of 1974.
M.N. Phadke, S.Q. Hasan and A.C. Ratnaparkhi
for the appellant.
Ram Panjwani, H.S. Parihar and 1. N. Shroff
for Respondent. No. 1.
Niren De, Attorney General, Rameshwar Nath
and Y.B. Desai, for Respondent No. 6.
The Judgnent of the Court was delivered by
RAY, C.J.--This appeal is by special leave from the judgment dated 16
September, 1976 of the High Court of Madhya Pradesh.
87 The appellant made an application under
Articles 226 and 227 of the Constitution in the High Court and impeached the
order dated 21 September 1974 whereby the Government dismissed the appellant's
objections against Scheme No. 9-M relating to Road Transport Nationalisation.
The appellant also impeached the Scheme as published in the Gazette on 11
The High Court held that in view of the fact
that Chapter IV-A of the Motor Vehicles Act, 1939 (hereinafter referred to as
the Act) is included as Entry 125 in the Ninth Schedule to the Constitution the
appellant could not challenge the Scheme.
The High Court erred in holding that it was
not open to the appellant to challenge the Scheme. The Attorney General rightly
and fairly said that the judgment of the High Court could not be supported on
The High Court failed to appreciate that
though Chapter IV-A of the Act is not open to any constitutional challenge it
is open to any aggrieved person to challenge any Scheme on the ground that it
is not a valid Scheme as required by the provisions of Chapter IV-A of the Act.
Scheme No. 9-M relating principally to
Jabalpur-Sagar and Damoh-Hatta routes was published by the State Transport
Undertaking in the State Gazette on 15 November, 1963. The Scheme was approved
and finally published in the State Gazette on 12 February 1965. Under the
Scheme which came into force with effect from 2 April, 1965 Jabalpur-Sagar and
Damoh-Hatta portions of the routes were reserved for exclusive operation by the
State Transport Undertaking. The portions Sagar-Bhopal, Rehli-Garhakota,
Hatta-Panna, Katangi-Majhouli and Damoh-Chhatarpur via Hirapur were kept for
joint operation with existing permit holders with the condition that the permit
holders with existing permits were not to pick up passengers from and to any
station lying between Nohta-Abhana Garhakota or any other two stations on
Jabalpur-Sagar road and Damoh-Hatta and vice-versa.
The Transport Authorities granted fresh
permits covering Abhana Garhakota portion treating it to be a portion of joint
operation with others. This action of the Transport Authorities was found to be
destructive of the true intention of Scheme No. 9-M.
It thus became necessary to modify Scheme No.
9-M.. The proposal was then placed before the Board of the State Transport
Undertaking referred to hereinafter as the Undertaking by, the General Manager.
The Board of the Undertaking considered the matter at its meeting held on 20
August 1973 and passed Resolution No. 8354approving the proposal modifying
Scheme No. 9-M. The Board 'Resolution directed inclusion of
Sagar-Rehli-Garhakota-Jabalpur and PathariaDamoh routes for exclusive operation
by the State Corporation. The Board directed that the Scheme giving the details
should be placed before the Board for its approval.
In this background Scheme No. 9-M giving
details was prepared and the proposal was placed before the Board of the
Undertaking at the meeting held on 88 29 November, 1973. The Board of the
Undertaking approved the proposal by Resolution No. 1395 and authorised consequential
Scheme No. 9-M was published in the Official
Gazette on 7 December 1973. The Scheme was thereafter considered by the Special
Secretary to the State Government in exercise of powers under section 68D of
the Act. Under section 68D of the Act persons contemplated in the Act might
file objections and the State Government would hear objections and then approve
or modify the Scheme. The State Government on 21 September 1974 approved the
Scheme after having heard the objections. The approved Scheme was notified in
the State Gazette dated 11 October 1974. The approved Scheme came into force
with effect from 19 November, 1974.
Scheme No. 9-M as approved, after hearing
objections, provided in clause (2) that the State Road Transport Services would
be provided on the routes of Jabalpur, Sagar and Bhopal regions. In clause (2)
of the Scheme 25 routes are set out. Route No. 2 is Jabalpur Bhopal via Patan,
Tendukheda, Damoh, Rehli, Sagar and Raisen. Route No. 3 is Jabalpur-Sagar via
Katangi and Damoh. Route No. 4 is Jabalpur-Sagar via Patan, Tendukheda, Damoh
and Rehli, Route No. 20 is Sagar-Patharia.
In clause (4) of Scheme No. 9-M it is said
that no person other than the Undertaking will be permitted to provide Roard
Transport Services on the routes or portions thereof specified in clause (2)
except as provided in clause (5).
In clause (5) it is stated that all Road
transport Services will subject to the provisions made in the subsequent
clauses, namely, No. (6) and (7) be provided by the Undertaking exclusively on
JabalpurSagar via Katangi, Damoh and Damoh-Hatta via Bangnon roads covering
portions of the routes specified in clause (2). The routes which the Undertaking
will operate in conjunction with others are (1)
Jabalpur-patan-Tendukheda-Abhana, (2) Damoh-Patera-HattaPanna, (3)
Damoh-Hirapur-Tikamgarh and (4) Damoh-HirapurChhatarpur portions of the routes
specified in clause (2).
In clause (7) of the Scheme is set out a list
of permits granted by the Regional Transport Authorities and modified as
indicated therein. In Item No. 20 of the list is set out the name of United.
Transport and in Items 22 and 23 is set out the name of S.S.M. Trading Company,
The route of Damoh-jabalpur via Abhana, Patan
which was in the name of United Transport Company was modified to remain
operative on the route of Abhana-Jabalpur via Tendukheda, Patan. The route of
Sagar-Jabalpur via Reihli, Gerhakota, Abhana, Tejgarh, Patan which had been
given to S.S.M. Trading Company was modified to Abhana-Jabalpur via Tendukheda,
It, therefore, appears from the Scheme that
the routes (1) Jabalpur-PatanTendukheda-Abhana, (2) Damoh-PateraHatta-Panna,
(3) Damoh-Hirapur-Tikamgarh, (4) DamohHirapur-Chhattarpur were to be operated
by the Undertaking in conjunction with existing permit holders.
89 The appellant under section 68D of the Act
preferred objections to the Scheme. The objections were four in number. First
the Scheme is mala fide as it is intended "to avert (sic) issuance of
permits on these routes to private operators". Second the Scheme is
published without the undertaking forming the requisite opinion under section
68C of the Act. Third the Scheme is discriminatory. Two permits of the
appellant are proposed to be curtailed whereas 14 permits on
Sagar-Rehli-Garhakota route have been left over. Fourth the Scheme does not
fulfil the four-fold tests in section 68C of the Act.
The Government heard the objections. The
State Secretary rejected the objections and approved the Scheme on 21 September
1974. The State Secretary held that no mala fide was proved. He also rightly
held that nationalisation of Road Transport Service would result in the legal
effect of stoppage of issue of permits on the routes mentioned in the Scheme.
In short, nationalisation of routes cannot be said to be mala fide. The State
Secertary found that the undertaking considered the Scheme and formed the
requisite opinion under Section 68C of the Act. The State Secretary found that
there was no discrimination. There was nothing to prove that similarly situated
operators were treated differently. There was no proof that the undertaking
knew of the existence of the alleged permit of the appellant or of others. The
State Secretary also found that the operators on Sagar-Garhakota-Patharia route
were operating because it was not taken for exclusive operation. In other
words, the Scheme does not concern the route on which the 14 operators are
alleged t0 be plying. The State Secretary also found that the four purposes in
section 68C of the Act were fulfilled.
The appellant repeated some of the objections
to the Scheme raised before the State Secretary and added new ones.
The appellant's contentions here were these.
First Scheme No. 9-M which was finalised was not the opinion formed by the
undertaking. Second the appellant asked for resolution of the undertaking dated
20 August 1973 and this was not given. Therefore, no opportunity was given to
the appellant to raise objections under section 68D of the Act. Third, Scheme
No 9-M does not fulfil the four-fold purposes, namely, providing (a) efficient,
(b) adequate, (c) economical and (d) properly coordinated road transport
service as mentioned in section 68C of the Act. Fourth curtailment of route
Sagar-Rehli-Garhakota is contrary to clause (5) of the Scheme.
Chapter IV-A of the Act contains sections
68-A to 68-I.
These provisions in Chapter IV--A are under
the heading "Special provisions relating to State Transport Undertakings".
The Scheme recites that the Undertaking
formed the opinion that for purposes of providing efficient, adequate,
economical and properly coordinated road transport service provided in clause
(2) of the Scheme, it is necessary in the public interest that the road
transport service in relation to the said routes should be run and operated by
the Undertaking in accordance with the Scheme. There is thus intrinsic evidence
inherent in the Scheme that the Undertaking formed the opinion for the Scheme.
The State Secretary rightly rejected the contention of the appellant which was
It appears from the order of the State
Secretary who heard the objections of the appellant against the Scheme that the
Secretary never made an order directing the Undertaking to produce the
resolution dated 20 August, 1973.
In the writ petition filed by the appellant in
the High Court the appellant stated in paragraph 19 that the State Secretary
instead of directing the Undertaking to produce these documents only observed
that the Undertaking might think over the request adding that he might himself
call for the said documents, if thought necessary. It also appears from the
judgment of the High Court that the proceedings before the State Secretary
indicated that the appellant's case was argued without any insistence on the.
production of the resolution. The High Court also noticed that the State
Secretary made no such direction. The fact that he made no such direction shows
that he found it possible to give the decision without production of it. The
contention of the appellant is without any merit.
The State Secretary rightly held that the
four-fold purposes indicated in section 68C of the Act are established. This
Court in Capital Multipurpose Cooperative Society Bhopal & Ors. v. The
State of M.P. & Ors(1), said that the right of a person to object to the
Scheme is to be confined only to the four grounds, namely, that the Scheme did
not provide (a) efficient, (b) adequate, (c) economical and (d) properly
coordinated transport services. The Scheme in the present case amply
establishes that it fulfills the four purposes mentioned in the Act.
It has to be' remembered that the Scheme in
clause (2) as well as in clause (5) mentions the exclusive operation of the
Undertaking on these routes in the public interest. A mere allegation that the
Scheme does not fulfill the purposes does not amount to any allegation and far
less any proof.
The appellant laid emphasis on the contention
that the appellant's permits in respect of the portion Garhakota to Sagar via
Rehli ought not to have been curtailed because the route was not reserved for
exclusive operation by the State Transport Undertaking under clause (5). It is
a matter of policy as to what routes should be curtailed for the operation of
the Scheme. Courts do not judge such policy decisions. The appellant's permits
on the Garhakota-RehliSagar routes expired on 26 and 30 September, 1976. The
appellant has been granted fresh temporary permit on the route which is of
conjoint operation. This temporary permit was granted to the appellant on 25
September, 1976. The appellant has taken advantage of it.
It has to be shown that unless the appellant
is allowed to operate on Sagar Rehli Garhakota route the Scheme will not be
efficient, adequate, economical and properly coordinated. The appellant did not
allege and substantiate the case. This case cannot be entertained also for the
reason that it is idle to suggest that the appellant will have not only
Abhana-Jabalpur via Tendukheda Patan route but also SagarRehli-Garhakota route
as of right.
-----------------------(1)  3 S.C.R.
91 It is not only competent but also
conscionable that a Scheme for nationalisation can be complete or partial. The
efficiency as well as adequacy of the Scheme is advanced by such policy
decisions of complete or partial nationalization of routes. See H.C.
Narayanappa & Ors, v. The State of Mysore & Ors. C) Under section 68D
of the Act the only scope for objection is whether the Scheme is efficient and
adequate and not whether exclusion is complete or partial.
Objections are confined only to the four
grounds of efficiency, adequacy, economy and proper coordination of road
transport service. Exclusion can be attacked only on these four grounds. There
was never any objection to the Scheme on exclusion related to any of these
grounds. The State Secretary in his order, on hearing the objections, rightly
said that the Sagar-Rehli-Garhakota Patharia route is not to be taken for
exclusive operation because there is no mention at all of the route. The Scheme
in clause (5) has specifically mentioned which routes are for operation by the
State Transport Undertaking in conjunction with others. The exclusion of the
appellant from route on which the appellant had earlier operated cannot be said
to challenge efficiency, adequacy, economy or proper coordination.
For these reasons the appeal is dismissed. In
view of the order of the High Court as to costs parties will pay and bear their
M.R. Appeal dismissed.
(1)  3 S.C.R. 742.