Dosa Satyanarayanamurty Etc. vs The Andhra Pradesh State Road Transport

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Not extracted

Decision Date: 8 September 1960

Coram: B.P. Sinha, J.L. Kapur, K. Subba Rao, K.N. Wanchoo, P.B. Gajendragadkar

Dosa Satyanarayanamurty and others filed a petition titled Dosa Satyanarayanamurty Etc. versus The Andhra Pradesh State Road Transport, which was decided on 8 September 1960 by a Bench consisting of Justice B. P. Sinha, Justice J. L. Kapur, Justice K. Subba Rao, Justice K. N. Wanchoo and Justice P. B. Gajendragadkar. The judgment was authored by Justice Subba Rao. The petitioners invoked Article 32 of the Constitution, seeking to enforce their fundamental right to conduct motor‑transport business in West Godavari District, Andhra Pradesh. They prayed for the issuance of a writ of certiorari or any other appropriate writ, order or direction that would set aside the schemes of road‑transport services that had been finally approved by the Government of Andhra Pradesh on 21 March 1960, and they also asked for ancillary reliefs that might be necessary to protect their right.

In exercising the authority granted by section 68C of the Motor Vehicles Act (IV of 1939), as amended by Central Act 100 of 1956, the Chief Executive Officer of the Andhra Pradesh State Road Transport Corporation, Shri Guru Pershad, published seven proposals on 7 December 1959. These proposals were placed in the Andhra Pradesh Gazette on 17 December 1959 and outlined seven schemes for the nationalisation of road transport covering various parts of West Godavari District. The notification invited the public and all affected parties to file objections within thirty days of its publication. More than three thousand objections were received by the Government. After reviewing these objections, the Government issued notices to the objectors or their representatives, informing them of the time, place and dates of hearing. The hearings were held on 10, 11 and 12 March 1960, during which two hundred objections were present, most of them represented by counsel. The Transport Corporation was represented by its Chief Executive Officer and its legal advisers, while the Minister responsible for the transport portfolio conducted an inquiry, examined the conflicting arguments, made definitive findings on the issues raised, rejected all objections except one, and approved the schemes with a minor modification. The Minister’s order set different effective dates for each of the seven schemes. Operators who were dissatisfied with the Minister’s order filed the present petitions seeking relief. Shri A. V. Viswanatha Sastri, counsel for the petitioners, raised several points before the Court: (1) that Chapter IV A of the Act exceeded Parliament’s legislative competence because the subject matter fell within the exclusive legislative domain of the States; (2) that the provisions of Chapter IV A infringed the petitioners’ fundamental rights under Article 19(1)(g) and were not saved by clause (6) of that article; (3) that Chapter IV A also violated Article 14 of the Constitution; (4) that the Government’s order confirming the schemes was tainted by bias and therefore void; (5) that although seven schemes were formally framed, they effectively constituted components of a single scheme designed to circumvent the Supreme Court’s decision in Srinivasa Reddy v. The State of Mysore; (6) that the schemes were void because they were prepared and published by the Chief Executive Officer, who was not authorised to act on behalf of the Transport Corporation under section 13 of the Road Transport Corporations Act; (7) that the schemes failed to disclose the number of vehicles to be operated on each route as required by rule 4 of the Andhra Pradesh Motor Vehicles Rules, and that the Minister’s modification did not remedy this deficiency; and (8) that the power exercised under the relevant provision was likewise improper.

In the petitions, the petitioners put forward a series of specific objections to the seven transport schemes that had been approved by the Minister. They argued that the order confirming the schemes was tainted by bias and therefore void, and asserted that although seven schemes were formally framed, they were in reality merely parts of a single scheme designed to evade the earlier judgment of this Court in Srinivasa Reddy v. The State of Mysore. The petitioners further contended that the schemes were invalid because they had been prepared and published by the Chief Executive Officer, who was not among those authorized to act on behalf of the Transport Corporation under section 13 of the Road Transport Corporations Act. Another grievance concerned the omission in the schemes, as proposed by the Transport Corporation, of the number of vehicles to be operated on each route, a requirement imposed by rule 4 of the Andhra Pradesh Motor Vehicles Rules; they maintained that the Minister’s modification directing the Corporation to supply that information still failed to satisfy the rule. The petitioners also pointed out that, under rule 5 of the Rules, the State Transport Undertaking had given itself the power to vary the frequency of services, a step that, together with a related note, conflicted with the provisions of the Act and was consequently void. Additionally, they claimed that the inclusion of three new routes in the proposed schemes was unlawful because the Transport Undertaking lacked authority to add new routes to any scheme it proposed. While other issues were raised in the petitions, those matters were not pressed before the Court. The Advocate General for the State of Andhra Pradesh, appearing for the respondent, sought to uphold the entirety of the schemes as approved by the Minister. The Court then indicated that it would address the contentions in the order in which they had been presented.

The Court first turned to the petitioners’ initial contention that chapter IV A of the Act was ultra vires because it fell within the exclusive legislative competence of the States. The Court noted that this point had already been examined and rejected by this Court in H. C. Narayanappa v. The State of Mysore. In that earlier decision, Justice Shah, speaking for the Court, had observed that chapter IV A could be validly enacted by Parliament under entry 21 read with entry 35 of the Concurrent List. Accepting that earlier judgment, the Court stated that no further discussion was required on the first contention. Turning to the second contention, the Court considered whether chapter IV A was saved by article 19(6) of the Constitution. The petitioners argued that, if chapter IV A, which provided for the nationalisation of road‑transport services, was not covered by the protection afforded by article 19(6), it would infringe the petitioners’ fundamental right to carry on trade or business under article 19(1)(g). The Court observed that the constitutional validity of chapter IV A had been previously examined in Gullapalli Nageswara Rao v. Andhra Pradesh Road Transport Corporation, where the Court had rejected the claim that the provision was a colourable attempt to take over the petitioners’ business. However, that earlier case had not addressed the specific question of infringement of article 19(1)(g) and the applicability of article 19(6). The Court therefore identified that issue as the point now before it for determination.

In the earlier decision of Gullapalli Nageswara Rao v. Andhra Pradesh Road Transport Corporation ([1959] Supp. I S.R. 319), the argument was advanced that Chapter IV A of the Act was a colourable piece of legislation whose true purpose was to appropriate the business of the petitioners by cancelling their permits, an act alleged to be in breach of Article 31 of the Constitution. The Court rejected that particular plea. However, the petitioners did not challenge the constitutional validity of Chapter IV A on the ground that it infringed the guarantee of the right to carry on trade or business under Article 19(1)(g), nor did they claim that the provision was outside the saving provision of clause (6) of Article 19. That specific issue – whether Chapter IV A can be upheld against a challenge based on Article 19(1)(g) – is now presented before the Court for determination.

Article 19(1)(g) provides that every citizen has the right to carry on any trade, business, or profession. The material portion of clause (6) of Article 19, as inserted by the First Amendment Act of 1951, states: “Nothing in sub‑clause (g) of the said clause … shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to … the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.” The core question therefore becomes the extent to which this saving provision in Article 19(6) shields Chapter IV A from a challenge that it contravenes the substantive right guaranteed by Article 19(1)(g).

Counsel for the petitioners submits that the protection afforded by Article 19(6)(ii) is limited to a situation where the State excludes an entire class of citizens from a trade, and does not extend to a partial exclusion of some members within the same class. Accordingly, the petitioners argue, Section 68C of the Act, which authorises the State Transport Undertaking to devise a scheme that may exclude certain persons belonging to a particular class, falls outside the ambit of the constitutional saving clause. The relevant excerpt from Section 68C reads: “Where any State transport undertaking is of opinion that … 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 petitioners maintain that because this provision permits selective exclusion, it is not protected by Article 19(6) and therefore vulnerable to constitutional challenge.

The effect of Section 68C, as interpreted by the petitioners, is that the State may formulate a scheme covering road‑transport services either in general or restricted to a specific class of service. Such a scheme empowers the State Transport Undertaking to operate the designated service on any chosen area, route or segment, and may do so to the exclusion of either all or only some of the persons currently providing that service. For example, the State could decide to take over the bus‑service segment and, under the authority of Section 68C, exclude all existing private operators or merely a subset of them. The petitioners argue that this power to partially exclude members of a class exceeds the scope of the partial‑exclusion safeguard contemplated in Article 19(6)(ii), and therefore the provision should not be immunised from attack on the ground that it infringes the fundamental right under Article 19(1)(g).

In this case, counsel argued that the statutory provision confers a power that goes beyond the limits allowed by Article 19(6)(ii) of the Constitution. He explained that while Article 19(6)(ii) does not authorise a partial exclusion of some persons within the same class of service, section 68C of the Act does permit such an exclusion. The Court observed that answering this contention required a proper understanding of the true meaning of Article 19(6). Under sub‑clause (ii) of Article 19(6) the State may enact a law relating to the carrying on of any particular business, industry or service by the State itself or by a corporation owned or controlled by the State, and that law may be made to the exclusion, either complete or partial, of citizens or otherwise. The provision in Article 19(6) is described as a saving clause; consequently a law that empowers the State to carry on a business is insulated from attack on the ground of infringement of a citizen’s fundamental right, provided that the law does not go beyond the scope of the provision. The Court noted that sub‑clause (ii) is expressed in very broad terms. It therefore allows the State to legislate for the carrying on of a business or service to the exclusion, either complete or partial, of citizens or otherwise. As a result, the law may provide for a service that is exclusive of all citizens, may exclude only some citizens, and may be confined to the whole State or to a particular portion of the State, a specified route or a part thereof. The term “service” was held to be wide enough to include not only general motor service but every species of motor service. Consequently, there is no restriction on the State’s power to make laws that confer a monopoly in a particular area and that determine which persons are to be excluded. In this view, the Court concluded that section 68C does not exceed the limits prescribed by Article 19(6)(ii) of the Constitution.

The next contention, labelled Re. (3), was that the provisions of Chapter IV‑A of the Act, and in particular section 68C, were in violation of Article 14 of the Constitution. The argument put forward was that Chapter IV‑A enables the State to discriminate between the State Road Transport Corporation on the one hand and private operators and private transport undertakings on the other, and that it also permits a similar discrimination among private operators themselves, leaving that discrimination to the arbitrary discretion of the Transport Corporation. The Court acknowledged that the provisions of the Chapter do indeed empower the legislature to frame a scheme that confers a monopoly on the State in respect of transport services, allowing either a partial or a complete exclusion of other persons. However, the Court observed that the scheme does not create any distinction between individual operators of a transport service and private transport undertakings; all such private entities are treated as a single class. The classification drawn by the statute is only between the State Transport Undertaking and the private transport undertakings, irrespective of whether the business is carried on by an individual, a firm or a company. The Court therefore turned to the question of whether such a classification offended the equality clause of the Constitution. Article 14 provides that the State shall not deny to any person equality before the law or the equal protection of the laws. The Court reiterated that this doctrine of equality has been repeatedly examined and does not prohibit reasonable classification for legislative purposes, provided that the classification is not arbitrary and is based on differences that have a rational relation to the object of the legislation. The Court noted that the Legislature placed the State Transport Undertaking in a separate class from other undertakings, and the issue to be decided was whether that classification was just and bore a reasonable relation to the purpose of the legislation as disclosed by section 68C.

In this case, the discussion turned to whether the classification that placed the State Transport Undertaking in a separate class from private operators violated the equality clause of the Constitution. Article 14 provides that “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.” The Court observed that the doctrine of equality under Article 14 has been examined so often that its principles are well settled. It reiterated that the article does not forbid reasonable classifications for legislative purposes, but such classifications must not be arbitrary; they must be based on differences that have a rational relation to the purpose of the law. The legislature, the Court noted, distinctly placed the State Transport Undertaking in a different class from other transport undertakings. Consequently, the issue was whether the classification created by Chapter IV A of the Act was just and bore a reasonable connection to the statutory objective. The objective of Chapter IV A, as articulated in section 68C, is to secure, in the public interest, an efficient, adequate, economical and properly coordinated system of road‑transport services. To fulfil that objective, section 68C empowers the State Transport Undertaking to devise a scheme for operating the service, which may involve the complete or partial exclusion of other persons. The Court found that the classification bore a clear nexus to this purpose. It explained that, ordinarily, a State Transport Undertaking is likely to be in a superior position compared with private persons or firms to deliver such services for the public benefit, because it can draw on greater administrative, financial and technical resources. The Undertaking can field better‑equipped buses, offer superior amenities to passengers, maintain regular schedules, and replace or repair vehicles promptly in emergencies. It can also employ competent supervisory staff to maintain high operational standards. While recognising that some private entities are capable of efficient service, the Court held that the State, with its broader capacities, is better placed to achieve the overarching goal of improving road‑transport services in all respects. Accordingly, when a legislature, presumed to understand the needs of its people, makes a distinction between a State Transport Undertaking and other transport operators, a reasonable basis for that distinction exists. Nevertheless, it was contended that section 68C and other provisions of Chapter IV A grant the State Transport Undertaking an arbitrary power to discriminate among individuals, private undertakings, and between individuals themselves. The Court referred to its earlier decision in Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation ([1959] Supp. 1 S.C.R. 319), noting that the scheme of Chapter IV A incorporates safeguards to prevent arbitrary action.

The Act establishes a machinery intended to keep the State Transport Undertaking within defined limits and to prevent it from acting arbitrarily. Section 68C expresses the legislative policy in clear and understandable language, and it authorises the State Transport Undertaking to launch a scheme only when the purpose of the scheme is to provide a road‑transport service that is efficient, adequate, economical and properly coordinated. A further condition imposed by the provision is that the scheme must be necessary in the public interest. Once a scheme satisfying these requirements is prepared, it must be published with all essential particulars in the official Gazette and also in any manner directed by the State Government. Persons who are affected by the scheme are given a prescribed period within which they may file objections. After the objections are received, the State Government is required to consider them and to give both the objectors, or their representatives, and the representatives of the State Transport Undertaking an opportunity to be heard on the matter. Upon completion of this hearing, the State Government may either approve the scheme as drafted or modify it. Any scheme that is approved or modified in this way is then published again. The rules framed under the Act further provide for a personal hearing of the parties concerned. If the State Transport Undertaking wishes to amend an existing scheme, it must follow exactly the same procedure, as set out in sections 68C, 68D and 68E of the Act. The provisions of Chapter IV A therefore show that before propounding a scheme the State Transport Undertaking must arrive at its decision on the basis of objective criteria. All parties whose interests are affected, as well as the general public, are given every opportunity to place objections before the Government. After following the prescribed quasi‑judicial process, the Government may confirm the scheme or make modifications. Consequently, before a scheme becomes final it is exposed to public scrutiny and the validity and appropriateness of its provisions are tested through this quasi‑judicial mechanism. While the Government itself is not a court, the procedure it must observe is consistent with the principles of natural justice. It has been argued that the State Transport Undertaking is effectively the State Government or a corporation owned or controlled by the State, and that the whole quasi‑judicial procedure merely serves as a façade to conceal an absolute and arbitrary exercise of power by the Government. The Court does not accept that Chapter IV A is merely such a device. The Legislature, in drafting the chapter, made a sincere attempt to safeguard individual rights against arbitrary executive action. Once it is accepted that Chapter IV A of the Act is constitutionally valid and that the Legislature may legitimately enact law for the nationalisation of road‑transport services, the procedure laid down for implementing that policy cannot be characterised as unreasonable. However, if in any particular case it is shown that the authorities acted in bad faith and colluded with the State Transport Undertaking and the State Government to deprive specific persons of their right to conduct road‑transport business or to drive them out of the trade on irrelevant grounds, such misconduct may constitute a ground for striking down that particular scheme. Nonetheless, the provisions of Chapter IV A themselves cannot be struck down.

The Court considered the argument that the provisions give an arbitrary power to the State Transport Undertaking and to the State Government to discriminate between individuals, between individuals and private undertakings, and between individuals and individuals. It noted that this question was raised in Saghir Ahmad v. State of U.P. That case dealt with the provisions of the U.P. Road Transport Act, 1951 (U.P. Act II of 1951). Under section 42(3) of that Act the government was exempted from taking permits for its own vehicles and could run any number of buses as it liked without the necessity of taking out permits for them. In furtherance of the State policy to establish a complete State monopoly in respect of road‑transport business, the transport authorities began not only to cancel the permits already issued to private operators but also to refuse to issue permits to others who would otherwise have been entitled to them. The constitutional validity of that section was questioned. It may also be mentioned that although the decision was given after the Constitution (First Amendment) Act, 1951, it was not based upon that amendment, as the Constitution before the amendment governed the rights of the parties therein. In that situation, addressing the argument based upon Article 14 of the Constitution, Justice Mukherjea, as then, made the following observations at page 731: “There is no doubt that classification is inherent in the concept of a monopoly; and if the object of legislation is to create monopoly in favour of the State with regard to a particular business, obviously, the State cannot but be differentiated from ordinary citizens and placed in a separate category so far as the running of the business is concerned and this classification would have a perfectly rational relation to the object of the statute.” Section 3 of that Act provided that “where the State Government is satisfied that it is necessary, in the interest of general public and for sub serving the common good, so to direct, it may declare that the Road Transport Services in general, or any particular class of such service on any route or portion thereof, shall be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of this Act”. It was contended that, as the State could choose any and every person it liked for the purpose of being associated with the transport service and as there were no rules to guide its discretion, that provision would offend against Article 14 of the Constitution. It was pointed out on behalf of the State that the discretion under section 3 of that Act was not uncontrolled as that could only be done by granting of permits in accordance with the provisions of the Motor Vehicles Act. Accepting the construction suggested, this Court held that the discretion to be exercised by the

The Court observed that the State’s power under the statute was a regulated discretion that had to be exercised in accordance with the statutory rules. It held that in the present matter there was no need to apply any liberal construction to the provisions, because Chapter VI A of the Act, in its explicit terms, set out a complete and, given the facts, satisfactory mechanism for reasonably regulating the exclusion of all or some private operators from a notified area or route. Accordingly, the Court concluded that the provisions of Chapter IV A of the Act did not violate the equality clause embodied in Article 14 of the Constitution.

Turning to the fourth ground of challenge, the Court examined the argument that the scheme was invalid because the Government acted with bias against private bus operators in West Godavari District and had predetermined the outcome. The petitions claimed that the Government exercised total control over the Road Transport Corporation, that the entire administration and authority over the road‑transport undertaking were vested in the Government, and that the Chief Secretary of the Government of Andhra Pradesh served as the chairman of that corporation. On this basis, it was alleged that the whole scheme, from its conception to its final approval, was essentially a governmental act. The contention was further advanced that the Government had thereby become a judge in its own cause, rendering its decision legally infirm.

The petitioners also argued that a sub‑committee, composed of Ministers, Secretaries and officers of related departments and presided over by the Minister in charge of transport, had met on 28 January 1960 and resolved that, under the nationalisation scheme, the State Government would take over the bus services in West Godavari District and Guntur District before the end of that year. Because the Minister responsible for the transport portfolio had, according to the petitioners, predetermined the issue, they claimed that he was disqualified from deciding the dispute between the State Transport Undertaking and the petitioners.

The same questions had arisen in Gullapalli Nageswara Rao v. The State of Andhra Pradesh, where it was similarly argued that the Chief Minister, who also held the transport portfolio, could not act as a judge in his own cause owing to bias against private operators. The Court distinguished between official bias, which stems from the inherent statutory duty imposed on an authority, and personal bias, which reflects a preference for or against a particular party. After reviewing relevant English case law, the Court quoted the passage at page 587: “These decisions show that in England a statutory invasion of the common law objection on the ground of bias is tolerated by decisions, but the invasion is confined strictly to the limits of statutory exception. It is not out of place here to notice that in England the Parliament is supreme and therefore a statutory law, however repugnant to the principles of natural justice, is valid; whereas …”

The Court observed that, unlike the United Kingdom where Parliament’s statutes may override natural‑justice principles, in India any law made by Parliament or a State Legislature must comply with the fundamental rights set out in Part III of the Constitution. The Court then explained that the provisions of the Act did not permit any breach of natural‑justice principles because the Act envisioned that, in the event of a conflict between the transport undertaking and private bus operators, the State Government would act as the adjudicating authority to resolve the dispute. A similar point was made by Justice Shah in H. C. Narayanappa v. The State of Mysore, although using slightly different wording. Justice Shah stated that the Government, although substantially a party to the dispute, acts judicially when it approves or modifies the scheme, and such approval or modification is not presumed to be biased. He further explained that the Minister or any government officer empowered to hear objections to the scheme is acting in an official capacity, and unless reliable evidence demonstrates personal bias, the decision cannot be attacked merely because the officer is a limb of the Government. In the earlier cases the transport department itself was the transport undertaking, but the present matter involves the State Road Transport Corporation, which is a corporate body with perpetual succession and its own common seal, and therefore is not a department of the State Government. Although the Act gives the State Government some degree of control over the Corporation, it cannot be said, either legally or factually, that the Corporation is a part of the State Government. Consequently, when the State Government decides disputes between the Corporation and private bus operators, it is merely exercising its statutory function, and the objection that it is biased lacks merit. Moreover, no evidence was shown that the Minister responsible for transport acted with personal bias. The mere fact that the Minister presided over the sub‑committee set up to implement the nationalisation scheme for bus services in West Godavari District does not, by itself, demonstrate bias. The respondent’s counter‑affidavit even contested the content and authenticity of the sub‑committee’s proceedings as reported in the Telugu daily “Andhra Patrica”. Even assuming the sub‑committee reached a conclusion, that conclusion cannot be regarded as a final and irrevocable decision that contravenes the Act; it was only a policy recommendation advising the State Government to pursue nationalisation in that district. Such a recommendation does not, either expressly or by necessary implication, predetermine the issue, but merely suggests that the policy would be implemented subject to the provisions of the Act.

In this case, the Court observed that the policy would be implemented subject to the provisions of the Act and did not find any suggestion that the Minister who headed the transport portfolio possessed personal bias against private bus operators. Consequently, the Court held that the petitioners had failed to establish that the Minister in charge of the transport portfolio was personally biased toward any of the private bus operators, and therefore the Minister was not disqualified from hearing objections filed under Chapter IV‑A of the Act. The next contention, identified as Re (5), relied on observations made by this Court in Srinivasa Reddy v. The State of Mysore, wherein Justice Wanchoo, after analysing the scope of section 68C of the Act, stated at page 136 that a scheme to be framed must be capable of being carried out in a single operation; this requirement, he explained, is the reason the Undertaking has been given the power to frame a scheme for an entire area, a route, or even a portion thereof. He warned that if the Undertaking were permitted to execute the scheme piecemeal, it could potentially abuse its implementation power, discriminate against certain operators in favour of others, undermine the integrity of the scheme, and, in effect, modify it contrary to the provisions of section 68E. Building on these observations, the petitioners argued that the State Government originally intended to create only one scheme for the whole district but, being unable to implement it simultaneously throughout the district, divided the single scheme into seven separate schemes in order to evade the Court’s earlier observations. The first respondent, in its counter‑affidavit, rejected this allegation by stating that, taking into account the material and financial resources of the Undertaking, each scheme had been designed to be executable in its entirety at once without compromising its integrity, and that the State Transport Undertaking would implement each published scheme on a date fixed by the State Government for that specific scheme. The Minister, in his order, also addressed this issue, noting that seven distinct schemes had been framed, each constituting an independent scheme, and that, according to the notification, each scheme would come into force only on a date to be fixed by the Government; although different dates might be assigned, each scheme would be implemented in full, with no partial implementation of any scheme. The Minister’s order indeed specified particular dates on which each scheme would become effective. The Court further clarified that it has never held that a phased programme for the nationalisation of transport services cannot be adopted in a State or in a district, nor has it prohibited the existence of more than one scheme for a district or a part thereof; the earlier observations were intended solely to prevent abuse of power through discriminatory, piecemeal implementation of a single scheme.

The Court observed that it had never expressed a limitation that a district or any part of a district could be subject to only a single scheme. Its earlier remarks concerning the prohibition of piecemeal implementation were intended primarily to prevent the exercise of power in a discriminatory manner, whereby certain operators might be favoured and others disadvantaged under a solitary scheme. In the present matter, seven distinct schemes were prepared not as a device to evade the Court’s guidance, but rather to eliminate the problems associated with implementing a single scheme in fragments. Each of those seven schemes corresponded to a different geographical area within the district, and the Government expressly stipulated that every scheme would be carried out in its whole, each commencing on a separate date. Consequently, the Court found no substantive reason to object to the creation of the seven independent schemes.

Reference (6) raises a challenge to the validity of those schemes on the basis that the Chief Executive Officer of the Andhra Pradesh Road Transport Corporation lacked the authority to publish them, and therefore the publication was allegedly defective. Acting under the powers granted by section 68C of the Act, the Andhra Pradesh State Road Transport Corporation drafted the schemes and caused their publication in Part II of the Andhra Pradesh Gazette, page 1310. The drafts bore the signature of Guru Pershad, who held the office of Chief Executive Officer of the State Transport Undertaking, Andhra Pradesh Road Transport Corporation. The relevant statutory framework of the Road Transport Corporations Act, 1950 (Act LXIV of 1950) is pertinent here. Section 4 declares that “Every Corporation shall be a body corporate by the name notified under section 3 having perpetual succession and a common seal, and shall by the said name sue and be sued.” Section 12 provides that a corporation may, by resolution passed at a meeting, authorize the Chief Executive Officer, the General Manager, or any other officer, subject to any conditions specified, to exercise such powers and perform such duties deemed necessary for the efficient day‑to‑day administration of its business. Section 13 stipulates that “All orders and decisions of a Corporation shall be authenticated by the signature of the Chairman or any other member authorized by the Corporation in this behalf and all other instruments issued by a Corporation shall be authenticated by the signature of the Chief Executive Officer or General Manager or any other officer of the Corporation authorized in like manner in this behalf.” Relying on these provisions, counsel for the petitioners argued that the preparation and publication of the schemes under section 68C constitute orders or decisions of the corporation and therefore must be authenticated by the Chairman or another duly authorised member as required by section 13, rather than by the Chief Executive Officer. The first respondent in its

The counter‑affidavit attempted to answer the petitioners’ claim by asserting that the Corporation, by a duly passed resolution, had authorized the Chief Executive Officer to exercise such powers and to perform such duties as it considered necessary for the efficient day‑to‑day administration of its business, and that, relying on that authorization, the Chief Executive Officer had published the schemes in the Gazette.

The first respondent based its defence on section 12 of the Road Transport Corporations Act rather than on section 13, contending that section 12 sustained the authority of the Chief Executive Officer to publish the schemes. The Court found no reason to reject the respondent’s statement that a resolution had indeed been passed by the Corporation in accordance with clause 12(c) of the Act. Consequently, the sole issue that remained was whether the act of publishing the proposed schemes prepared by the Corporation in the Gazette fell within the scope of day‑to‑day administration of the Corporation’s business.

The Court noted that the Chief Executive Officer possessed no statutory power to formulate a scheme. Section 68C expressly permits only the State Transport Undertaking to prepare a scheme and to cause each such scheme to be published in the official Gazette, or in any other manner directed by the State Government. Accordingly, the scheme need not be published directly by the Corporation; the Corporation may merely cause its publication in the Gazette.

The Court observed that publishing a scheme in the official Gazette is a ministerial act that involves no discretion and is merely a mechanical task performed as part of ordinary administration. Accordingly, there is no difficulty in characterising the publication as a purely ministerial function that the Chief Executive Officer could discharge pursuant to the resolution authorized under section 12(c) of the Act.

For the purposes of the present case, the Court presumed that the Corporation had decided the terms of the proposed schemes and that such a decision would have been authenticated by the Chairman or any other duly authorized member of the Corporation. The Chief Executive Officer, in turn, did nothing beyond publishing the scheme in the exercise of his administrative duties.

On this basis, the Court held that the Chief Executive Officer acted within his authority when he published the proposed schemes in the Andhra Pradesh Gazette.

The next argument considered the provisions of rule 4 of the Andhra Pradesh Motor Vehicles Rules. The relevant portion of that rule provides that a scheme or an approved scheme to be published in the official Gazette, as required under section 68C or section 68D, must contain, inter alia, the number of vehicles proposed to be operated on each route.

In several of the schemes, the number of vehicles for each route was not individually specified; instead, a single figure was shown for two adjoining routes, thereby omitting a distinct entry for the intermediate route. When an objection concerning this omission was raised before the Government, the Minister accepted the objection and directed that the scheme be modified so as to list the number of vehicles for each route separately.

The Minister received the objection and instructed that the scheme be altered so that the number of vehicles to be operated on each route would be shown separately. Accordingly, the schemes were revised to indicate the vehicle count for each individual route, and the revised approved schemes were published in the Gazette on 21 March 1960. By making these modifications, the approved schemes complied with rule 4(2) of the Andhra Pradesh Motor Vehicles Rules, because the duly modified schemes now contained the number of vehicles proposed for each route. Nevertheless, the contention advanced was that the Minister himself ought to have fixed the vehicle numbers for each route rather than merely directing that the approved schemes be amended. The record did not reveal any dispute before the Minister concerning how the number of vehicles shown for two or more routes should be apportioned among those routes; the sole objection raised was that the practice of bracketing a single number between two or more routes violated rule 4. Although the Minister’s order contained only a direction, the actual apportionment of vehicles between routes was not undertaken by the State Transport Authority; it was effected by the Government, since the approved schemes were published by the State Government and not by the Chief Executive Officer. It had to be presumed that the allocation was made with the Minister’s approval. The Court found no merit in this objection.

The next issue presented was that rule 5, framed by the State Government exercising the power conferred under section 68(1), was inconsistent with the provisions of section 68E of the Andhra Pradesh State Transport Act and therefore void. The schemes prepared by the State Transport Authority bore a note stating: “The frequency of services on any of the notified routes or within any notified area shall, if necessary, be varied having regard to the traffic needs during any period.” This note was essentially a reproduction of the note appended to rule 5. The question that arose was whether rule 5 and the accompanying note conflicted with section 68E. Section 68E provides that any scheme published under subsection (3) of section 68D may at any time be cancelled or modified by the State transport undertaking, and that the procedures laid down in sections 68C and 68D shall, as far as they can be applied, be followed in every case where a scheme is proposed to be modified as if the proposed modification were a separate scheme. The short question, therefore, was whether the variation of the frequency of services by the State Transport Undertaking amounted to a modification of a scheme within the meaning of section 68E. The Court observed that rule 5 was not so characterised.

The Court observed that the rule was not harmless as the Advocate‑General of Andhra Pradesh suggested in his submission. Under the rule the State Transport Undertaking may, having regard to traffic needs at any time, increase or decrease the number of trips made by existing buses. The Undertaking may also vary service frequency by adding or removing buses without consulting the public or hearing any representations. Such an increase or decrease may be undertaken only to achieve an efficient, adequate and economical transport service on a particular route as defined in section 68C. When the original schemes are initially proposed, persons affected by those schemes may lodge objections requesting that the number of buses on a route be altered from the proposed figure. The Government may consider such suggestions and, if appropriate, amend the schemes accordingly in accordance with the procedural requirements prescribed under the Act. However, the rule permits the authority to modify the schemes without any reference to the public or to the Government itself. Counsel for the respondent argued that the accompanying note was intended only for emergency situations and should not be applied to ordinary operational adjustments. The Court found that both the rule and the note are broad enough to cover not merely emergencies but also any period of modification, regardless of its duration. Accordingly, the Court held that the rule grants the State Transport Undertaking substantial power to alter the scheme in one respect, though such power must be exercised according to section 68E. Because the rule was found to be void, the Court concluded that the note had been inserted into the schemes illegally. Nonetheless, the Court refused to declare the entire schemes void, agreeing with counsel that the schemes could survive without the note. The Court observed that the note could be removed from the schemes without affecting their overall structure or altering the intended objectives of the transport service. The Court further noted that, absent the note, the schemes remained self‑contained and could not be said to have been dependent on its inclusion. Consequently, the Court directed that the note be deleted from the schemes, while confirming that the schemes themselves were otherwise valid.

The final argument challenged the inclusion of new routes in the schemes, specifically the routes from Eluru to Kovvur and from Nidadavol to Jeelugumilli. It was contended that section 68C applies only to existing routes and therefore cannot justify the addition of these new corridors. The counsel relied on the language of section 68C, which mentions “any area or route or portion thereof,” to support the contention that only pre‑existing routes are covered. The Court extracted the relevant portion of the provision, which states that when a State transport undertaking believes it is necessary in the public interest to operate services on any area, route or portion thereof, it may propose a scheme. The Court observed that the statute does not limit the term “route” to those already existing, and that a proposed route can itself be regarded as an “area” within the meaning of the provision. Accordingly, the Court concluded that section 68C empowers the State Transport Undertaking to include new routes in a scheme, and therefore the challenged routes are legally permissible. The Court further noted that the inclusion of these routes was consistent with the purpose of providing broader public transport coverage across the state. It held that the statutory language was intended to give the undertaking flexibility to respond to emerging transport needs, including the establishment of entirely new service corridors. Consequently, the objection that the schemes violated section 68C on the ground of new routes was dismissed as unsupported by the functional reading of the statute.

The petitioner argued that the expression “route” used in Section 68C of the Act should be interpreted to mean only a route that already exists. The argument relied on the wording “route or portion thereof” found in the statutory provision, asserting that this phrase clearly indicates that the legislature intended to refer to an existing route, because a scheme could not logically be framed with respect to a portion of a route that has not yet been created. The Court examined this contention and found it unconvincing. It observed that Section 68C expressly permits a scheme to be framed with respect to any area, any route, or a portion of any area or route. There is no inherent conflict in the statute between the concepts of an “area” and a “route.” A route that is proposed for future operation is also an area, limited precisely to the stretch of road that the proposed route will occupy. Consequently, the statute enables the State Transport Undertaking to devise a scheme that includes a new route running from point A to point B, and such a new route satisfies the definition of an area within the meaning of Section 68C. Accordingly, the Court held that Section 68C unquestionably empowers the State Transport Undertaking to propose schemes that incorporate new routes, and the contention that the term “route” is limited to pre‑existing routes was rejected.

The Court noted that several other matters were raised in the affidavits presented before it, but those matters were not actively pursued or argued at the hearing, and therefore they did not form part of the final consideration. In the final analysis, the Court concluded that the note appended to the schemes concerning the frequency of services must be removed, as it was not supported by the statutory framework. Apart from this amendment, the Court found that the petitions did not succeed on any other ground. As a result, the petitions were dismissed with costs, and a single set of hearing fees was awarded. The dismissal of the petitions was formally recorded, and the order reflected that the petitions were dismissed in their entirety.