1. The petitioner herein is a transport operator operating a vehicle from Madras to Pondicherry. A draft scheme of nationalisation was published in relation to this route on 6th January, 1971. Objections were called for and 28th April, 1975 was fixed as the date for hearing the objections. The petitioner has filed this writ petition on 21st April, 1975 seeking a writ of prohibition prohibiting the respondents from taking any further proceedings in pursuance of the said draft scheme, dated 6th January, 1971. The following contentions have been urged by the petitioner in this writ petition:
(1) Section 68-HH which has been introduced in the Motor Vehicles Act by Tamil Nadu Amendment Act XVIII of 1968 is invalid for the reason that the State Legislature cannot directly amend the Motor Vehicles Act enacted by the Parliament notwithstanding Article 254 (2) of the Constitution. (2) That the nationalisation of the route in question which is an inter-State route is violative of not only Article 14 but also of Article 301 read with Article 303 of the Constitution. (3) That there is inconsistency between the entries found in Schedules I and II in that the petitioner's name is shown in Annexure I though the scheme is said to be to the total exclusion of all private operators. (4) That Section 68-HH in so far as enables the State Government to delegate the power to more than one authority, is bad.
2. The contentions Nos. 3 and 4 set out above have already been dealt with in W.P. No. 2963 of 1974 and they have been rejected exactly under similar circumstances. Hence, these contentions have to be rejected following the view taken in that case. Only the first two contentions remain to be considered .
3. As regards the first contention the petitioner's submission is as follows:Section 68-HH has been added to the Motor Vehicles Act authorising the State Government to delegate by notification the powers exercisable under Chapter IV-A by the State Transport Undertaking, being the State itself, to such authority or Gazetted Officer subordinate to the State Government as may be specified, in the notification. In pursuance of the powers conferred on the State Government by Section 68-HH the State Government has by its order G.O.Ms. No. 1199, Home, dated 20th May, 1969 delegated the power to the Director of State Transport Department. This delegation will include the various powers under Chapter IV-A of the Act including the power under Section 68-C to form the opinion mentioned therein and promulgate a draft scheme. It is in pursuance of this delegation the Director, State Transport Department, Madras has promulgated the draft scheme on 6th January, 1961 which is impugned herein. If Section 68-HH was not there, the opinion would have been formed by the State Government in accordance with the rules of business made under Article 166 of the Constitution and the Director of Tamil Nadu, State Transport Department would have no locus standi to frame a draft scheme under Section 68-C of the Act. Section 68-HH has been introduced by the Tamil Nadu Act XVIII of 1968. But the Tamil Nadu Legislature has no power directly to repeal or amend a Central Act notwithstanding the provision in Article 254 (2) of the Constitution. The said Article does not authorise the Legislature of a State either to repeal or amend a. Central Act and in so far as the Tamil Nadu Act XVIII of 1968 has amended the Central law by introducing Section 68-HH; it has to be taken to be void.
4. Learned Counsel for the petitioner in support of his submission relied on a decision of a Division Bench of this Court in Writ Appeal No. 526 of 1975 batch dated 15th April, 1975 (V.G. Ramakrishnan, Sri Ramakrishna Bus Service, Wallajabad appellant etc.). In that case by Section 5 of Tamil Nadu Act XLVIII of 1974, Section 133 (1) of the Motor Vehicles Act was repealed. The said Madras amending Act received the Presidential assent on 4th November, 1974 and the amending Act came into force from 8th November, 1974. It was contended before the Bench that it is beyond the power of the State Legislature to enact Section 5 which repealed Section 133 (1) of the Motor Vehicles Act. Dealing with this contention the Bench observed that though the topic of legislation, motor transport, is a concurrent subject covered by Entry 35 of List III of the VII Schedule to the Constitution, there being no power given by the Constitution to the State Legislature to directly repeal a Central enactment under that entry, the State Legislature cannot amend or repeal any Central Act, notwithstanding the existence of Article 254 (2) of the Constitution. According to the Bench.
That was settled by the Supreme Court long before, for instance, that proposition was held by Zaverbhai v. State of Bombay : 1SCR799 Under Section 107 (2) of the Government of India Act, 1935, which is similar to Article 254 (2) of the Constitution of India, the Central Legislature had no authority conferred upon it to enact a statute repealing directly any provincial statute. This proposition was justified by a decision on a like provision in the Canadian Constitution in Attorney-General for Ontario, v. Attorney-General for the Dominion (1896) A.C. 348 where it was held that though a law enacted by the Parliament of Canada and within its competence would override Provincial legislation covering the same field,, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute.
The observations of the Supreme Court in Zaverbhai's case : 1SCR799 relied on by the Bench are these:
Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situation similar to that under Section 107 (2) of the Government of India Act, it was observed by Lord Weston in Attorney-General for Ontario v. Attorney-General for the Dominion (1896) A.C. 348 that though a law enacted by the Parliament of Canada and within its competence would override Provincial legislation covering the same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. That would appear to have been the position under Section 107 (2) of the Government of India Act with reference to the subjects mentioned in the Concurrent List.
It is on the basis of the above observations Section 5 of Tamil Nadu Act XLVIII of 1974, was struck down as being unconstitutional by the Division Bench. The contention of the learned Counsel for the petitioner is that in view of the said decision of the Division. Bench Section 68-HH of the Act which has been introduced by the Tamil Nadu Act XVIII of 1968 has to be struck down as unconstitutional for want of legislative competence.
5. The learned Counsel for the respondents on the other hand submits that the decision of the Bench in the above case should be taken to have been impliedly overruled by the Full Bench decision of this Court in Natesa Reddiar and Anr. v. Saradambal and two Ors. : AIR1979Mad223 In the said second appeal the question that arose for consideration before the Full Bench was as regards the constitutional validity of the Tamil Nadu Hindu Women's Rights to Property (Extension to Agricultural Lands') Act. The said Act merely amended the Hindti Women's Rights to Property Act XVIII of 1937, which is a Central Act, so far as it is applicable to Madras State. A similar contention as the one in this case was urged in that case as well. It was urged in that case that it is not open to the State Legislature to amend the definition of property occurring in the Central Act as it has no power to do so. This contention was also based on the observation of the Supreme Court above extracted in Zaverbhai's case : 1SCR799 Dealing with the said observations of the Supreme Court with reference to the contention put forward by the petitioner, the Full Bench observed that these observations cannot be taken to be even obiter dicta being casual observations and the above observations cannot be taken advantage of by the appellants to question the validity of the Tamil Nadu Act XXVI of 1947, on the ground that the provincial Legislature cannot directly amend the Central Act, and that the said observations .have to be taken only as casual observations and not as a decision in that case and that such an observation on a question which the Supreme Court was not required to decide cannot be treated as having been decided so as to become a binding decision. It was held ultimately in that case that so long as the State Legislature could adopt and incorporate an Act passed by the Central Legislature by making suitable amendments thereto, it can adopt the Central Act and amend the same provided the requisite assent has been obtained from the President under Section 254 (2) of the Constitution. The Full Bench has also pointed out that the State Legislature could adopt and incorporate an Act passed by the Central Legislature by making suitable amendments thereto, is concluded by the two decisions of Supreme Court i.e., Jaora Sugar Mills v. State : 1966CriLJ459 and Krishna Chandra v. Union of India. : AIR1975SC1389 Though the Full Bench has not referred to the decision of the earlier Division Bench in Writ Appeal No. 526 of 1975, batch, the observations of the Supreme Court in Zaverbhaifs case : 1SCR799 which formed the basis for the decision of the Division Bench were understood as casual observations and not as a binding decision. The Full Bench has taken the view that the said later two decisions of the Supreme Court indicate that the observations in Zaverbhai's case, cannot be correct. The Full Bench also referred to the decision of the Bombay High Court in Zoolfiquar' Ali v. Official Trustee : (1967)69BOMLR326 which took a view different from the said observations made in Zaverbhai's case : 1SCR799 We are, therefore, inclined to agree with the learned Counsel for the respondents that in view of the Full Bench decision which has taken a contrary view, the decision of the Bench in Writ Appeal No. 526 of 1975 should be taken to have been impliedly overruled. We are of the view that on the basis of the principle laid down in the Full Bench in Second Appeal No. 1645 of 1974, the State Legislature can adopt the Central Act as its own and make suitable amendments thereto in exercise of its legislative power. In this case, admittedly the State Legislature has got the power to legislate on the topic of motor transport under Entry 35 of List III. Instead of making a separate law it adopted the Motor Vehicles Act, which is a Law enacted by the Parliament, as its own and introduced Section 68-HH therein. It is always open to any Legislature if, it so chooses to adopt any existing piece of legislation made by any other legislative body as its own and apply the same with such modifications as considered necessary to suit its object and purpose and by such adoption and incorporation the Act which has been incorporated becomes an Act passed by it. It must be remembered that the case before the Full Bench related to the amendment made by the State Legislature in exercise of its power under legislative Entry in List II to a Central law made in respect of a legislative Entry in List I. Even in such a case, the Full Bench felt that the State Legislature could adopt and incorporate a legislation made by the Parliament and amend the same as if it were an Act passed by it within its legislative sphere. Here we have an a fortiori case where both Parliament and the State Legislature have concurrent power to enact on the topic of motor transport. It is true the Parliament has made a comprehensive law on the topic of motor transport, by enacting the Motor Vehicles Act. But Article 254 (2) specifically enables the State Legislature to enact a law on the same topic in exercise of its legislative power with the assent of the President. There is, therefore, no question of Section 68-HH being invalid for the reason that the State Legislature has no legislative competence to do so. In view of the foregoing discussion, the first contention has to be rejected.
6. The second contention is two fold. One is that the nationalisation of inter-State route in this case offends Article 14 as being discriminatory. As regards the complaint based on Article 14, the argument is as follows:
In the draft scheme relating to the route in Schedule I item 3 it is stated that the scheme is for the complete exclusion of the operators other than those holding primary permits issued by the transport authority of Pondicherry. According to the petitioner there are five operators including himself for whom permits have been issued for the route in question by the transport authority in Madras State, and three operators who had been granted permits by the Pondicherry State Transport Authority. In a scheme of nationalisation of road transport for an area or a route there is no justification for permitting the operators holding primary permits issued by the Regional Transport Authority of Pondicherry State to operate while eliminating the operators who got primary permits from the authorities in Madras State. Permitting the primary permit holders of Pondicherry alone to continue to ply on the route will amount to a hostile and conscious discrimination which is hit under Article 14 of the Constitution. It is also stated that such discrimination between persons having primary permits from local authorities and those getting primary permits from authorities outside the State has no reasonable nexus with the object of the scheme of nationalisation.
As regards this contention learned Counsel for the respondents submits that Chapter IV-A under which the scheme of nationalisation has been notified is included in the 9th Schedule and therefore no challenge can be made against a scheme framed under Chapter IV-A under Articles 14 and 19 of the Constitution. The inclusion of Chapter IV-A in the 9th Schedule will certainly give immunity for the said Chapter from a challenge under Articles 14 and 19 of the Constitution. But the said immunity cannot extend to all the schemes or other proceedings taken under the said Chapter. Immunity cannot extend to the executive action taken under Chapter IV-A. This has been so held in Sindhi Sahiti Multipurpose Transport, Co-operative Society Limited v. State of Madhya Pradesh and Ors : 2SCR86 In that case the Supreme Court has held that though. Chapter IV-A of the Act is not open to any constitutional challenge in view of its inclusion in 9th Schedule, it is open to any aggrieved person to challenge any scheme framed thereunder on the ground that it is not a valid scheme as required by the provisions of Chapter IV-A. Prog Ice and Oil Mills v. Union of India : 1978CriLJ1281a is a case which arose under the Essential Commodities Act. In that case the Supreme Court expressed the view that though the Essential Commodities Act, having been placed in the 9th Schedule of the Constitution, is not open to constitutional attack, that protection does not extend to anything done or to be done in future under any of the provisions of the said Act or any orders made under Section 3 of that Act. In view of these decisions the schemes framed under Chapter IV-A can be challenged on the basis of a discrimination violative of Article 14.
7. On the merits of the petitioner's contention that the notification is discriminatory and as such it is violative of Article 14 in that out of the seven existing operators on the route only five are eliminated and the rest are being allowed to operate on the route which has been nationalised, learned Counsel for the respondents contends that unless the persons having primary permit's from Pondicherry State are allowed to continue to operate, the Government of Pondicherry may refuse to countersign the permits issued to the vehicles introduced on the route as a result of the nationalisation, that only with a view to avoid such a situation the operators having primary permits from Pondicherry State have not been excluded from operating on the route. The reasoning given by the respondents for not excluding the operators having primary permits from Pondicherry State has no nexus with the object of the scheme which is one of nationalisation of the route in question. The fact that some other authority in Pondicherry may not give its countersignature, if the persons having primary permits from that authority are not. allowed to continue on the route is quite irrelevant. It has no rational relation with the object of nationalisation.
8. It is also submitted by the learned Counsel for the respondents that the operators having primary permits from the Madras State and operators having primary penults from Pondicherry State are persons differently situated and therefore a differentiation may be made between the two. But, having regard to the object which is one of nationalisation of. the route there is no reason as to why the local operators alone should be excluded and the operators having primary permits from other State should be allowed to run on the route as usual. Such a differentiation does not appear to be justified by the scheme of nationalisation. In this view of the matter we are inclined to hold that the proposed scheme is violative of Article 14 of the Constitution.
9. A similar view has been taken by the Division Bench of Andhra Pradesh High Court in B. S. Padmavathamnia v. Andhra Pradesh State Road Transport Corporation by its General Manager, Hyderabad and 3 Ors (1978) 1 A.P.L.J. 492 : (1978) 2 A.W.R. 559 wherein the Court has upheld the attack based on Article 14 for the reason that the draft scheme expressly provided for saving some of the operators, while eliminating others thereby bringing about a discrimination between the operators of that State and those in other States.
10. Coming to the further submission of the learned Counsel that the scheme is violative of Article 303 of the Constitution, it is seen that a decision of the Andhra Pradesh High Court in B. S. Padma-vathamma v. Andhra Pradesh State Road Transport Corporation by its General Manager, Hyderabad and three Ors. (1978) 1 A.P.L.J. 492 : (1978) 2 A.W.R. 559 supports the petitioner's stand. In that case, a draft scheme proposed under Section 68-C of the Act in respect of an inter-State route was challenged inter alia on the ground that it is violative of Article 303. The Court upheld that contention, on the ground that the proposed draft scheme does make and bring about a discrimination between the operators in one State and operators of another State and as such it is hit by Article 303 of the Constitution. The reasoning of the learned Judges in that case is this:
Articles 301 to 303 do make, in our opinion, one thing clear. While the Parliament can impose restrictions on the freedom of trade, commerce and intercourse, between one State and another or within any part of the territory of India, in public interest, it shall not, in that process, provide for preference to the subjects of one State over another, or discriminate the subjects of one State against another. The constitution makers, obviously wanted to ensure the economic integrity of the country by prohibiting such preference and discrimination, with a view to promote the true integration and unity of the people of India. Now, it is axiomatic that what the law cannot do, the authority acting under the law cannot equally do. It may also be noticed that Article 303 does not even provide for any classification on the basis of territory, or otherwise, as is held by Courts to be authorised by Article 114. If we contract the language emphasised in Clause (b) of Article 304 this aspect becomes clearer. We are therefore, of the opinion that Mr. Venugopal is right when he complains that the proposed schemes do make and bring about a discrimination between the operators of this State and the operators of the Karnataka State and are therefore, hit by Article 303.
Learned Counsel for the respondents faced with the above decision contends that the said decision runs counter to the decision of the Supreme Court in Kalyan Singh v. State of U. P. (1963) 1 S.C.J. 50 : A.I.R. 1962 S.C. 1183 and that the said decision has not given due weight to the following phrase occurring in Section 303 (1):. by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.
According to the respondents unless the discrimination between one State and another is brought about by a legislation on a topic relating to trade and commerce in any of the? Lists in 7th Schedule, Article 303 will not come into operation, and the draft scheme is not a law made by the legislature of a State by virtue of any entry relating to trade and commerce which contemplates preference of one State over another or a discrimination between the State and another and only in such cases Article 303 can be invoked. Learned Counsel seeks support for this submission from a passage in Seervai's Constitutional law of India, Second Edition, Volume II:
The non obstante Clause in Article 303 (1), in so far as it refers to Parliament, limits Parliament's power to impose restrictions on the freedom of trade, commerce or intercourse in the public interest. This limitation denies to Parliament the power to make any law giving, or authorising the giving of any preference to one State over another, or making or authorising the making of, any discrimination between the State and another by virtue of any entry relating to trade and commerce in any of the Lists in Schedule VII. It is clear that the words referring to the entries, whatever may be the content of those entries, are words of limitation and they do not exclude preference or discrimination by virtue of any other entry, though as has been submitted earlier, any such preference or discrimination would have to stand the test of Article 14. It is clear however that under our Constitution an entry relating to trade or commerce cannot cover a tax since taxing entries are separated from the general subject of legislation. Therefore, the discrimination which is forbidden does not refer to a tax and the same is true of the State Legislatures since the language is identical.
Article 303 refers to a law made by Parliament or a Legislature of a State under any entry relating to trade and commerce in any of the Lists in 7th Schedule and says that a law made under that entry cannot give or authorise any preference of one State over another or make a differentiation between one State and another. It is not possible to ignore the language of Article 303 and say that any discrimination made between one State and another or people of one State and another in any legislation can be challenged under Article 303. The trade and commerce as a topic of legislative entry occurs in Entry 41 and Entry 42 of List I, Entry 26 of List 2 and Entry 33 of List 3. Here, the provisions of Chapter IV-A of the Motor Vehicles Act have been enacted under the legislative Entry 35 occurring in List 3. Therefore, the Legislature of a State while enacting a law under Motor Transport is not making a law on trade and commerce, or inter-State trade and commerce so as to attract the limitation contained in Article 303. The Article 303, in our view, cannot be taken to be a fetter on the legislative power of the Parliament or of the State Legislature in making a law under any legislative topic other than the one relating to trade and commerce. This aspect of the matter has not been considered by the Andhra Pradesh High Court in the above case, presumably the point was not urged before them. We are, therefore, of the view that the draft scheme, in this case; is not violative of Article 303 of the Constitution.
11. As a result of the foregoing discussion, the draft scheme has to be held to be bad for violation of Article 14. Therefore, this writ petition is allowed.