1. This Order will also govern the disposal of Miscellaneous Petition No. 108 of 1966.
2. The question raised by these two petitions under Articles 226 and 227 of the Constitution is as to the-validity of two Schemes described as Scheme No. 53 and Scheme No. 49 published by the State Government under Section 68D (3; of the Motor Vehicles Act. 1939 (hereinafter referred to as the Act).
3. In exercise of the powers conferred by Section 68C of the Act the Madhya Pradesh State Road Transport Corporation (hereinafter called the Corporation) published in the Gazette, dated 12th February 1965. Scheme No. 53 for the running and operation by the Corporation of road transport services on the routes specified in the Scheme. On the same date, another Notification under Section 68C containing proposals propounding another Scheme, namely, Scheme No. 49, was published by the Corporation for the running and operation by the Corporation of services on the routes specified in that Scheme.
These notifications invited persons affected by the Schemes to file their objections, if any, before the respondent No. 2, Special Secretary to Government in the Home Department, in accordance with rule 4 of the Madhya Pradesh Stale Road Transport Services (Development) Rules. 1959 (hereinafter referred to as the Rules). The petitioners filed objections under Section 68D of the Act which were heard and decided by the Special Secretary, he being the person appointed by the Government to hear and dispose of the objections. On 31st December 1965. The Special Sercretary passed an order under Section 68D (2) rejecting the petitioners objections to Scheme No. 53 and approving the Scheme with some modifications. He directed that the Scheme would come into force from 7th March 1966 Thereafter, on 14th January 1966, Scheme No. 53, as approved and modified under Sub-section (2) of Section 68D, was published in the Gazette as required by Sub-section (3) of Section 68D. The order approving with some modifications Scheme No, 49 making it effective from 15th March 1966 was passed by the Special Secretary on 31st December 1965. ft was published in the Gazette, dated 7th January 1966, as required by Section 68D (3).
During the course of hearing of the objections in Scheme No. 53, the Special Secretary issued notices to 15 permit-holders whose permits were not mentioned in the Scheme published by the Corporation under Section 68C but who were likely to be affected by the Scheme. Out of the 15 permit-holders, 11 operators filed objections and appeared through their counsel. The petitioners Nos. 13 and 17 to 22 are permit-holders of this category. They objected to their being joined in the proceedings and urged that the Special Secretary had no jurisdiction to issue notices to them. That objection was overruled and the Scheme was approved and published as already stated. The approved Scheme affects the permits held by the petitioners Nos. 13 and 17 to 24. (Petitioners Nos. 23 and 24 were ex parte before the Special Secretary.)
4. The petitioners, who operate transport services wholly or partly on the routes covered by the two Schemes, question the validity of the Schemes and pray that by issue of a writ of certiorari the two Schemes as published under Section 68D (3) as also the orders, dated 31st December 1905, passed by the Special Secretary, be quashed and the respondents be restrained from giving effect to the Schemes.
5. Before we deal with the eases on merits, we would like to dispose of a preliminary objection raised by Shri Chitale, learned counsel for the respondent No. 3, M. P. State Road Transport Corporation, regarding tenability of Miscellaneous Petition No. 107 of 1966, in which Scheme No. 53 is under challenge,. The objection is based on the following facts. The Scheme No. 53 came into operation with effect from 7th March 1966. The petition came up for preliminary bearing before this Court on 14th March 1966 when the rule nisi was issued by this Court. This Court, however, refused to issue ad interim writ staying the operation of the Scheme and prohibiting the Road Transport Authorities from taking action under Section 68 F of the Act. As a result, the permits held by the petitioners were cancelled.
It is, therefore, urged that the petitioners had no locus standi to continue the proceedings, as a right to continue a petition under Article 220 of the Constitution postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which the petitioner is personally interested. As the permits of the petitioners had been cancelled they have no subsisting personal rights the protection of which can now be sought before this Court. For this proposition, reliance is placed on the following observations in Kalyan Singh v. State of U. P. AIR 1962 SC 1183.
'It is necessary to bear certain facts and considerations in mind in dealing with the remaining contentions. By the Scheme (Clause 7) the permit of the appellant was cancelled. The scheme as approved was published in the U. P. Gazette on October 8, 1960, and was to come into operation on October 15, 1960 or thereafter. A notification was published on November 4, 1900 under Section 68-F (2) of the Act cancelling the appellant's permit with effect from November 27, 1900. The appellant there fore ceased to have any right to ply his vehicles on the route and he had no right to object tothe vehicles of the Stale transport undertaking plying on that route. If the scheme wasvalidly promulgated and became final withinthe meaning of section 68D (3), it had theeffect of extinguishing all rights of the appellant to ply his vehicles under his permit. Aftercancellation of his permit he could not maintain a petition for a writ under Article 226because a right to maintain such a petitionpostulates a subsisting personal right in theclaim which the petitioner makes and in theprotection of which he is personally interested. It is true that the appellant did at thedate of the petition filed in the High Courthold a permit which was to ensure till the 27thNovember, 1900. But if the permit was validlyterminated from the dale specified, he will notbe entitled to relief even if he had on thedale of the petition a subsisting right. GroundNo. 2 must therefore fail.
x x x x x x
The Regional Transport Authority was by the terms of the scheme left no discretion in the mailer. It was by the scheme that the right of the appellant was restricted and if the scheme became final and binding the Regional Transport Authority had no authority to permit the appellant to ply his vehicles. The order passed by the Regional Transport Authority was purely consequential on the scheme, and if the scheme is not open to challenge orders consequential thereon will not also be open to challenge. We are supported in this view by the observations of this Court in Abdul Gafoor v. State of Mysore, AIR 1961 SC 1556 that: It appears to us that when deciding what action to lake under Section 68F (2) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the schemes. The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flows from the scheme. The duty is therefore merely mechanical; and it will be incorrect to say that there is in these matters any his between the existing operators and the State Transport Authority. There is no justification therefore for saying that when taking action under Section 68F(2) the Regional Transport Authority is exercising a quasi-judicial function. Apart from this it has to be pointed out that action under Section 68F (2) is really under Section 68F(1). Once the scheme has been approved, action under Section 68F(1) flows from it and at the same time action under Section 68F (2) flows from the same scheme'.
The observations of the Supreme Court at first sight appear to support the contention advanced on behalf of the Corporation. But if they are read in the context in which they have been made, it becomes plain that the Corporation cannot derive any assistance from them.
In that case Kalyan Singh, who held the permit on the route proposed to be nationalized had filed his objections to the proposed scheme. The scheme was, however, approved and published by the Government (U. P.). It was to come into operation from 15th October 1960 or thereafter. On 12th November 1960, a notification, dated November 4, 1960, was published in the Gazette under Section 68F of the Act cancelling the permit of Kalyan Singh with effect from 27th November 1960. Under the scheme, stage carriages belonging to the State Transport Undertaking were permitted for plying on the nationalized route without obtaining any permit from the Road Transport Authority. In these circumstances, Kalyan Singh filed a writ petition under Article 226 of the Constitution before the Allahabad High Court. That petition was dismissed and an appeal was preferred by Kalyan Singh before the Supreme Court. Another operator had filed a petition under Article 32 of the Constitution directly before the Supreme Court challenging the same scheme. Both the mailers were heard together.
It was urged before the Supreme Court (a) that the scheme was initiated by the Stale Government and not by the Stale Transport Undertaking as required by Section 68C and hence the scheme was not validly made; (b) that the objections to the scheme were not properly heard and disposed of by appropriate authority; (c) that the Secretary to the Regional Transport Authority had no jurisdiction to issue an order under Section 68-F (2); and (d) that even after approval of the scheme, plying of the buses by the Stale Transport Undertaking without obtaining necessary permits was contrary to law. A point was also raised that when Kalyan Singh's permit was renewed during the pendency of the consideration of the scheme before the Government, certain conditions as to the duration of the permit were attached which the authorities bad no jurisdiction to impose.
The first ground the Supreme Court considered in detail and rejected it. As to the second ground, the Supreme Court was of the opinion that the same could not be allowed to be raised before the Supreme Court, as it was not raised in the petition filed before the High Court; nor was any basis made out for the same in the petition filed under Article 32 of the Constitution, Having disposed of the first two grounds, which were directed against the validity of the scheme, the Supreme Court further observed that if the scheme was validly promulgated and became final within the meaning of Section 68 D(3), it had the effect of extinguishing all rights of the appellant Kalyan Singh to ply his buses under the permit arid the appellant could not maintain the petition, as he had no subsisting right. This observation relates to grounds (c) and (d), referred to above. If there is no challenge to the validity of the scheme, or if that challenge is negatived as was done by the Supreme Court, what follows is that the scheme will remain a validly promulgaled scheme. In that case, ihc cancellation of the permit automatically follows and the perm it-holder loses his right He cannot then be permitted to question the legality or otherwise of the action taken under Section 68F.
This is what their Lordships say in Kalyan Singh's case AIR 1962 SC 1183. From what we have staled above, it is clear that their Lordships of the Supreme Court have not laid down the law that as soon as a scheme is brought into force, it is made immune from any atlack. It may be mentioned here that finality is attached to the scheme under Section 68D (3) to a legally and properly framed and approved scheme. If the scheme is not framed by proper authority or if it is not approved by State Government, after giving proper opportunity to the objectors, or if there is any other defect in the procedure followed by the Government in approving the scheme, the scheme cannot acquire the status of a properly approved scheme and no finality can be attached to it. In the present petition, there is a challenge to the validity of the Scheme itself. We have, therefore, come to the conclusion that the preliminary objection is without any substance and must be rejected.
6. The Schemes have been attacked on several grounds which are common to these two petitions. Some of the grounds of challenge arc similar to those raised in Premchand Jain v. Slate of M. P. AIR 1965 Madh Pra 196 and Premchand Jain v. Stale of M. P. AIR 1966 Madh Pra 117 and are concluded by the decisions of this Court in the two cases of Premchand Jain. Some oilier grounds are similar to those raised in Miscellaneous Petition No. 351 of 1965. The judgment in that case has been delivered by us today. Those grounds stand concluded by the decision in Miscellaneous Petition No. 351 of 1965.
7. It would, however he convenient to mention the grounds raised by the petitioners and which have been concluded by our previous decisions. The petitioners contend:
(1) That Shri R. S. Shukla, the Special Secretary, had no jurisdiction to hear the objections or to approve or modify the Schemes for the reasons-
(i) that the power conferred in that behalf on the State Government under Section 68D (2) and (3) of the Act could not be delegated;
(ii) that if the power could be delegated at all, it could be only under Section 68D (2-a) and not under the Rules of Business:
(iii) that even the delegation under the Rules of Business was had as on the dates on which the Special Secretary issued to the petitioners notices to file their objections, he was only invested with the power of disposing of the objections and not with the power of 'approving or modifying the schemes';
(iv) that the power of approving or modifying the schemes which was given to the Special Secretary subsequently on 12th January 1966 should have been given simultaneously along with the power of disposal with which he was invested on 12th July 1963; and
(v) that as the State Government did not establish a separate Motor Vehicles Department as required by Section 133A of the Motor Vehicles Act, 1939, that department could not be allotted under the Rules of Business and consequently no action under Chapter IVA of the 1939 Act could be taken under the Rules of Business.
(2). That the Explanation to Sub-section (1) of section 68D of the Act inserted by the local Amending Act No. 2 of 1963 is ultra vires of the amended rule 6 of the Rules giving the objectors only seven days' notice before the date of hearing was not consistent with Section 68D (2) and did not give them an effective opportunity of hearing.
(3). That the Road Transport Corporation Act, 1950. under which the respondent-Corporation was established does not authorise the Corporation to undertake any Scheme of nationalization of road transport or to publish any Scheme under Section 68C of the Motor Vehicles Act, 1939.
(4). That the Corporation was not validly constituted when it passed resolutions formulating the proposals of the two Schemes and authorising their publication.
(5). That the draft Schemes and the approved Schemes were vitiated inasmuch as in the draft Schemes the material on which the respondent-Corporation formed the opinion that for the purposes of providing an efficient, adequate, economical and properly co-ordinated system of road transport services, it was necessary in the public interest to propound the two Schemes, was not disclosed.
(6). That the respondent No. 2, the Special Secretary did not give to the applicants any real and effective opportunity to show that the Schemes published by the Corporation were not in the public interest and that they did not provide an efficient, adequate, economical and co-ordinated road transport services and thus violated the mandatory provisions of Section 68D (2) rendering the final and approved Schemes invalid. This ground is based on the contention that the Special Secretary rejected without any justification their prayer for examination of certain witnesses and for production of certain documents and statements by the Madhya Pradesh State Road Transport Corporation The production of these documents was aimed at showing that the petitioners were better operators than the Corporation and that the Corporation was unfit to carry on the operations for satisfying the fourfold purposes envisaged under Section 68C of the Act. The oral evidence proposed to be tendered was also for the purpose of showing that the Corporation was not better equipped than the operators.
(7). That the orders passed by the Special Secretary approving the Schemes did not show that the applied his mind to the question whether the Schemes were in the public interest and would provide an efficient, adequate, economical and properly co-ordinated road transport services
The first two grounds have been concluded by the two Premchand Jain's Cases, AIR 1965 Madh Pra 190 and AIR 1966 Madh Pra 117 already referred to The rest of the grounds me concluded by our decision in Misc. Petn. No 351 of 1965 (Madh Pra). AH the abovesaid grounds are rejected for the reasons stated in those cases.
8. The last ground urged in both the petitions is based on Article 14 of the Constitution. The details of the alleged discrimination are given in paragraph 33 of Miscellaneous Petition No. 107 of 1966 and in paragraph 26 of Miscellaneous Petition No. 108 of 1966. We have carefully considered the objections raised on this ground and have come to the conclusion that persons similarly situated were not differently treated and that no violation of Article 14 of the Constitution is involved. We shall, however, briefly refer to the objections on this head.
Scheme No. 53:
(i) Dayabhai and Co. (petitioner No. 12) held two permits for Pati-Khargone and for Pati-Julwania. The permit for Pati-Khargone was totally cancelled, while the permit held on Pati-Julwania was curtailed so as to remain operative between Pati and Bar-wania. The Corporation in the Return has submitted that Pati-Khargone route (73 miles) covered 46 miles of the nationalised route, while Pati-Julwania covered only 28 miles of the nationalized route. The Special Secretary was, therefore, right in cancelling the permit on Pati-Khargone. while curtailing the permit for Pati-Julwania so as to confine the operation of the permit between Pati-Barwania. It is also submitted by the Corporation that this modification was made on the request of the permit holder himself This position was not controverted before us. We, therefore hold that there was no discrimination.
(ii) A complaint is made that permits shown in Serial Nos, 1 to 11 under Clause 7(a) of the final Scheme have been proposed to be cancelled, while permit-holders operating on Khandwa-lndore route have not been touched even though part of the route between Khandwa and Desgaon is covered by the nationalized route. It may be mentioned that the routes covered by permits. Serial Nos. 1 to 11, completely lie within the nationalized route: while in the case of permit-holders on Khandwa-lndore route, a very small portion, namely, about 6-8 miles is covered by the nationalized route. It cannot, therefore be said that the permit-holders operating on Khandwa-lndore route are similarly situated as compared to permit-holders at Serial Nos. 1 to 11. No discrimination is. therefore, involved. Similar is the case with respect to Fakruddin Tayab Bhai and Wadhumal Jeomal Bhatia. who hold permit for Indore-Bhikamgaon via Desgaon. Between Desgaon and Bhikamgaon a very small portion of the nationalized route is involved.
Scheme No. 49:
(i) The Petitioner No. 1 holds a permit on the route Mandsaur-Singoli The whole of the route has been nationalized. The cancellation of the permit held bv the petitioner No. 1 is. therefore, justified. The complaint that the permit-holder from Ratlam to Neemuch has been allowed to operate on part of the nationalized route, namely, between Mandsaur to Neemuch, and thus there is discrimination is without substance. The petitioner No. 1 and the holder of the permit between Rallam to Neemuch are not similarly situated.
(ii) Similar is the case with regard to operators on the route Pratapgarh-Chitorgarh. In their operation a very small portion of the nationalized route is involved. The position of holders of permits on the routes Rampura-Indore, Manasa-Mandsaur and Rampura-Mand-saur is similar to the operators of Pratapgarh-Chitorgarh inasmuch as they only cover a small portion of the nationalized route No discrimination is involved in their case.
(iii) The petitioners Nos. 3 and 4 hold permits for Rampura-Jawad. Between Neemuch to Jawad a very small portion of the nationalized route is involved. Neemuch is an important centre. The Special Secretary has therefore, acted rightly in curtailing the permit from Rampura to Neemuch. In the case of permit-hoiders on the routes Manasa-Mandsaur and Rampura-Mandsaur the portion between Piplia and Man-dsaur comes under the nationalized route. The suggestion is that as in the case of the petitioners 3 and 4 their permit was curtailed, in the case of the permit-holders from Manasa-Mandsaur and Rampura-Mandsaur the permit should have been curtailed upto Piplia. It is a matter of common knowledge that Mandsaur is an important centre, while Piplia has no importance. By curtailing the route upto Piplia the operators for Rampura-Mandsaur and Manasa-Mandsaur would have been put to great loss. It cannot, therefore, be said that the petitioners Nos. 3 and 4 are similarly situated as compared to other permit-holders, referred to above. No discrimination is, therefore, involved.
9. Apart from the general grounds, referred to above, a special ground has been raised on behalf of the petitioners Nos. 13 and 17 to 24 in Miscellaneous Petition No. 107 of 1966 which requires serious consideration. The contention of the petitioners is that their permits were not included in the Scheme No. 53 as framed and published by the Corporation The Special Secretary, however, on the request of the Corporation, issued notices to the petitioners calling upon them to file objections, if any. The notices were issued on the ground that the petitioners, were likely to be affected by the proposed Scheme
The petitioners questioned the legality of the procedure followed and urged that the Special Secretary had no jurisdiction to issue notices and thus indirectly try to introduce something in the Scheme which was not thert. That objection was overruled by the Special Secretary and the permits held by the petitioners were included in Clause 7 (a) of the finally approved scheme. Clause 7 (a) enumerates the permits that are to be cancelled as a result of the nationalization of the route The explanation given on behalf of the Corporation is that in Scheme No 22, already prepared and published there was a proposal to cancel the permits held by the petitioners concerned though the permits did not cover the entire route pro posed to be nationalized under Scheme No 22 and that was the reason why their permits wore not again proposed to be cancelled in Scheme No. 53. While approving the Scheme No. 22, the Special Secretary did not cancel the permits of the said petitioners but the permits were curtailed so as to exclude their operation from the nationalized route under Scheme No. 22, with the result that the petitioners' permits were confined to the route proposed to be nationalized under Scheme No. 53.
That is the reason why notices were issued to the petitioners. Shri Phadke, learned counsel for the petitioners, urged that whatever might have been the reason for non-inclusion of the permits in Scheme No. 53, the fact remained that in the proposed Scheme there was no proposal for cancellation of the permits held by the petitioners, in the curtailed form or otherwise, and that the Special Secretary had no jurisdiction to issue notices to the petitioners, much less to approve the Scheme in excess of what was proposed by the Corporation. Shri Phadke referred to Section 68-C of the Motor Vehicles Act and Rule 3 of the Madhya Pradesh State Road Transport Services (Development) Rules, 1959, and urged that the Corporation was bound in law to frame the Scheme-in the manner provided by the said provisions and in no other manner. The form prescribed under Rule 3 requires that all the permits pro posed to be cancelled or curtailed should he enumerated in the proposed Scheme. It was said that no additions could be permitted to he made after the proposed Scheme was notified and that the Special Secretary had no jurisdiction to consider anything that was not in the proposed Scheme.
10. Shri Chitale learned counsel for the Corporation, urged that what is required under Section 68-C is that the Corporation should mention the route that is proposed to be nationalized and should give particulars of the nature of senices proposed to be rendered and these alone arc the mandatory requirements; the other particulars that may be prescribed under the rules are only directory. It was, therefore, urged that if any permits are not mentioned in the Scheme through oversight or in circumstances such as those existing in this case, that lacuna can be made good at a subsequent stage; the purpose of mentioning the permit numbers and the names of the holders thereof is to give notice to the holders of the permits so that they may raise objections, if any; that as the permits were not mentioned in the Scheme the operators concerned were given notices by the Special Secretary and thus there was substantial compliance with the requirements of law.
It was further urged that under the scheme of nationalization the purpose is to exclude the private operators completely or partially therefore, the proposed Scheme mentions the routes to be nationalized and mentions the permits that may be curtailed or otherwise dealt with, that is enough notice that all other permits are to be cancelled. Merely because n large number of permits were mentioned in the Scheme which were proposed to be cancelled and some were omitted through inadvertence, that would not make any difference. Apart from this, Shri Chitale pointed out that in the Scheme published by the Corporation there is a fool-note under Clause 7 (a) which reads:
'Similar or any other permits, if any, granted on any route, covering Khandwa-Khargone-Julwania-Barwani - Sedhwa - Niwali-Khelia-Rajpur-Khetia portions shall also be deemed to have been cancelled.'
This footnote, according to Shri Chitale, gave a clear notice to all the permit-holders on the route proposed to be nationalized that their permits were proposed to be cancelled. Shri Chitale, therefore, submitted that the petitioners had notice of the Scheme and that it was their duty to file objections within the prescribed time. Their failure to do so deprived them of the right of challenging the Scheme. The Special Secretary issued notices ex gratia so as to give the petitioners additional opportunity to file their objections.
11. We find it difficult to accede to the submissions made by Shri Chitale. Section 68-C authorises the Stale Transport Undertaking to prepare a scheme to run or operate road transport services on the proposed route or area to the exclusion, complete or partial, of other persons or otherwise. The expression 'otherwise' is wide enough to include the proposal of the State Transport undertaking to operate the services on a route to the exclusion of some of the holders of the permits and not all. If such a scheme is proposed, it may be exposed, in certain cases, to an attack on the ground of discrimination under Article 14 of the Constitution. But if there is a reasonable classification, such a scheme may very well be sustained. It thus becomes obvious that the State transport undertaking must necessarily state in the scheme the permits that are proposed to be cancelled while nationalizing the particular route. If some permits are mentioned, while others are omitted, it may well be assumed that the State Transport Undertaking does not desire the exclusion of those permit-holders. This clearly shows that strict compliance with Rule 3 and the Form prescribed under it is obligatory. Apart from this, the Government can approve or modify only the Scheme framed by the State Transport Undertaking in terms of Section 68-C. The Government have no authority to approve something not included in the Scheme on the hypothesis that by implication it shall be deemed to have been included in the Scheme. No doubt, the State Government can totally reject a Scheme. But it cannot under the authority of approving and modifying the Scheme claim the power of approving something which is not proposed at all. The footnote under Clause 7 (a) is vague and not in consonance with the mandatory requirements of Rule 3 of the Madhya Pradesh State Road Transport Services (Development) Rules. 1959.
By resorting to deeming provisions the scope of the Scheme cannot be allowed lo be enlarged in an indirect manner. There was nothing to prevent the Corporation from proposing the cancellation of the permits held by the petitioners concerned in Scheme No. 53 as well. There was no justification for assuming that the Scheme No. 22 would be approved without modifications and that the permits of the said petitioners would be cancelled. The explanation given on behalf of the Corporation is wholly unacceptable. The Special Secretary erred in acting on the request of the Corporation and in issuing notices to the petitioners concerned and in including their permits in the approved Scheme. In doing so, he acted without jurisdiction. The Scheme to the extent it includes the permits of the petitioners Nos. 13 and 17 to 24 and directs the cancellation thereof is void and is hereby quashed. The part of the Scheme quashed by us is several from the rest of the Scheme. The rest of the Scheme is not in excess of the Scheme framed by the Corporation nor is there any other infirmity. We, therefore, do not find any justification for quashing the entire Scheme.
12. In the result, Miscellaneous Petition No. 108 of 1966 fails and is dismissed with costs. Counsel's fee Rs. 200 for the Advocate-General and Rs. 200 for the counsel for the Corporation. Miscellaneous Petition No. 107 of 1966 is party allowed. The part of the Scheme No. 53 that includes the permits held by the petitioners Nos. 13 and 17 to 24 and directs the cancellation thereof is quashed. Rest of the Scheme shall remain in operation. The permits held by the petitioners Nos. 13 and 17 to 24, if cancelled, shall be restored. In the circumstances of the case, we make no order as to costs. The outstanding amounts of the security deposits shall be refunded to the respective petitioners.