J.Y. Kondala Rao and Ors vs Andhra Pradesh State Road Transport Corporation

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

Court: supreme-court

Case Number: Writ Petition (civil) 72 of 1960

Decision Date: 8 September 1960

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

The case titled J.Y. Kondala Rao and others versus Andhra Pradesh State Road Transport Corporation was decided by the Supreme Court of India on 8 September 1960. The matter was recorded as Writ Petition (Civil) 72 of 1960, and the parties were identified as the petitioners J.Y. Kondala Rao with several co‑petitioners and the respondents Andhra Pradesh State Road Transport Corporation together with additional respondents. The bench that heard the petition comprised Chief Justice B.P. Sinha, Justices J.L. Kapur, P.B. Gajendragadkar, K. Subba Rao and K.N. Wanchoo, and the judgment was authored by Justice Subba Rao. The decision is reported in AIR 1961 SC 82. The petitions were filed under Article 32 of the Constitution for the purpose of enforcing the petitioners’ fundamental right to carry on the business of motor transport in West Godavari District, Andhra Pradesh. The petitioners sought writs of certiorari or any other appropriate writs, orders or directions that would set aside the schemes of road‑transport services which had been finally approved by the Government of Andhra Pradesh on 21 March 1960, together with any incidental reliefs that might be appropriate.

In exercising the authority conferred by Section 68C of the Motor Vehicles Act, 1939, as amended by the Central Act 100 of 1956, the Chief Executive Officer of the Andhra Pradesh State Road Transport Corporation, Shri Guru Pershad, issued seven proposals dated 7 December 1959. These proposals were published in the Andhra Pradesh Gazette of 17 December 1959 and set out seven schemes for the nationalisation of road transport covering different parts of West Godavari District. The notification invited objections from the public and affected parties within thirty days of publication, and more than three thousand objections were received. After reviewing the objections, the Government sent notices to the objectors or their representatives and to representatives of the Transport Corporation, informing them of the time, place and dates of the hearing. The hearings were held on 10, 11 and 12 March 1960, during which about two hundred objectors appeared, most of them being represented by counsel. The Transport Corporation was represented by its Chief Executive Officer and its legal advisers. The Minister responsible for transport conducted an enquiry, considered the opposing arguments, made specific findings on the issues raised, rejected all objections except one, and approved the schemes with a slight modification. The seven schemes were ordered to come into force on different dates as specified in the Minister’s order. The aggrieved transport operators, dissatisfied with that order, filed the present petitions seeking relief. Counsel for the petitioners, Shri A. V. Viswanatha Sastri, raised several points, including that Chapter IVA of the Act exceeded Parliament’s legislative competence, infringed the petitioners’ right under Article 19(1)(g) of the Constitution without falling within the protection of clause 6, violated Article 14, was tainted by bias, was designed to circumvent the precedent set in Shrinivasa Reddy v. State of Mysore, was invalid because it was prepared by a person not authorised under Section 13 of the Road Transport Corporations Act, and failed to specify the number of vehicles to be involved.

The petitioners presented several grounds for challenging the schemes approved by the Minister. First, they contended that Chapter IVA of the Act infringed the exclusive legislative competence of the States. Second, they argued that the provisions of Chapter IVA violated their fundamental right to practice any occupation, trade, or business under Article 19‑1‑g of the Constitution and that this violation was not saved by Clause 6 of the same article. Third, they maintained that Chapter IVA contravened the equality principle enshrined in Article 14 of the Constitution. Fourth, they claimed that the order confirming the schemes was tainted by bias and therefore void. Fifth, they asserted that although seven schedules were framed, they functioned as a single scheme and that this device was intended to circumvent the Court’s judgment in Shrinivasa Reddy v. State of Mysore. Sixth, they alleged that the schemes were void because they were prepared and published by the Chief Executive Officer, who was not authorised under Section 13 of the Road Transport Corporations Act to act for the Transport Corporation. Seventh, they observed that the schemes failed to specify the number of vehicles to operate 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 defect. Eighth, they argued that the State Transport Undertaking, by relying on Rule 5 of the Rules, gave itself the power to vary service frequency, a power that conflicted with the Act and was therefore void. Ninth, they maintained that the inclusion of three new routes in the proposed schemes was illegal because the Transport Undertaking lacked authority to add new routes. The Advocate‑General for the State of Andhra Pradesh, on the other hand, sought to uphold the schemes in their entirety. The Court indicated that it would now address each contention in the order presented.

Regarding the first contention, the Court noted that it had already examined and rejected the argument that Chapter IVA exceeded Parliament’s competence in H C Narayanappa v. State of Mysore, Petition No. 2 of 1960, decided on 28 April 1960. In that decision, Justice Shah, speaking for the Court, observed: “We are therefore of the view that Chapter IVA could competently be enacted by the Parliament under entry No 21 read with entry No 35 of the Concurrent List.” The Court found no further reason to revisit that conclusion and, with respect, accepted and applied the earlier ruling. Turning to the second contention, the Court identified the core issue as whether Chapter IVA is saved by Article 19‑6 of the Constitution. The question consequently was whether the provisions of Chapter IVA, which relate to the nationalisation of road‑transport services, fall within the permissible class of legislation protected by Article 19‑6, or whether they infringe the petitioners’ right to conduct business in motor transport under Article 19‑1‑g.

In the matter before the Court, the petitioners argued that Chapter IVA of the Act, which authorised the nationalisation of road‑transport services in the manner prescribed therein, was not a permissible piece of legislation falling within the protection of Article 19(6) of the Constitution; consequently, they maintained that the provision would infringe the fundamental right of the petitioners to carry on business in motor transport. The constitutional validity of Chapter IVA had earlier been examined in the case of Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation, reported in 1959‑Supp‑1 SCR 319 and AIR 1959 SC 308. In that precedent, the argument advanced was that Chapter IVA was a colourable enactment whose real purpose was to appropriate the petitioners’ business by cancelling their permits, an act alleged to be contrary to Article 31 of the Constitution; that contention had been rejected by the Supreme Court. However, in the present proceedings no challenge had been raised against Chapter IVA on the ground that it violated the provisions of Article 19(1)(g) concerning the right to trade or business, nor had it been asserted that the provision was unsaved by clause (6) of Article 19. The petitioners now raised precisely that issue. Article 19(1)(g) guarantees every citizen the right to carry on any trade, business, or profession. Clause (6) of Article 19, as amended by the Constitution (First Amendment) Act, 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 sole question therefore was the extent to which Article 19(6) protected Chapter IVA from a challenge that it contravened Article 19(1)(g). Counsel for the petitioners submitted that sub‑clause (ii) of Article 19(6) allowed only a complete exclusion of an entire class of citizens and did not authorise a partial exclusion of some members within that same class. They contended that Section 68C of the Act, which permits a State transport undertaking to devise a scheme that excludes certain persons, fell outside the protection afforded by Article 19(6). The relevant excerpt of Section 68C provided: “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….” Under this provision a scheme could be framed for road‑transport services generally or for a particular class of service, thereby empowering the State transport undertaking to operate the service in any specified area, route or portion thereof, and to exclude either all or some of the other persons who were operating that service.

In this case the Court observed that section 68C of the Act allows the State to exclude either all or some of the persons who operate the service, whether that service is viewed in its entirety or as a particular class of service. The provision therefore enables the State to assume control of a specific class of transport, for example the bus service, and to bar either every operator or only selected operators who are presently engaged in that class of business. Counsel for the petitioner submitted that the provision grants a power that is broader than what is permissible under Article 19 (6) (ii) of the Constitution. In other words the argument advanced was that while Article 19 (6) (ii) does not permit a partial exclusion of some persons within the same class of service, section 68C appears to allow such a selective exclusion. The Court explained that answering this contention required an examination of the true scope of Article 19 (6). Under sub‑clause (ii) of Article 19 (6) the State is authorised to enact a law relating to the carrying on, by the State itself or by a corporation owned or controlled by the State, of any particular business, industry or service, and that law may be made “whether to the exclusion, complete or partial, of citizens or otherwise.” The Court noted that Article 19 (6) functions only as a protective clause; a law that empowers the State to carry on a business is insulated from a challenge on the ground of violation of a citizen’s fundamental right so long as the law does not go beyond the limits set by the article. The language of sub‑clause (ii) is very broad. It permits the State to legislate for the carrying on of a business or service with either a complete or a partial exclusion of citizens, or without any exclusion at all. Consequently the law may provide for a service that is exclusive of all citizens, may exclude only certain citizens, or may operate in the whole of the State or in just a part of the State, on a particular route or a segment thereof. The term “service” is sufficiently expansive to include not only the general motor service but also its various specific forms. Accordingly there is no constitutional limitation on the State’s authority to enact statutes creating a monopoly for itself in a defined area, nor on the choice of persons to be excluded. In this view the Court held that section 68C does not exceed the boundaries prescribed by Article 19 (6) (ii). The Court then turned to the next contention, identified as point (3), which alleged that Chapter IVA of the Act, and in particular section 68C, violated Article 14 of the Constitution. The argument asserted that Chapter IVA permits the State to discriminate between the State Road Transport Corporation on one side and private operators and private transport undertakings on the other, and that it also allows a similar discrimination among private operators themselves, leaving such differentiation to the arbitrary discretion of the Transport Corporation. The Court accepted that the provisions of the Chapter indeed enable the framing of a scheme that grants a monopoly to the State in the field of transport services, either partially or completely.

In this case, the Court noted that while the scheme authorized by the Act could result in the complete exclusion of other persons from providing road‑transport services, the statutory language does not draw any distinction between an individual who operates a transport service and a private transport undertaking. Both categories are treated as a single class. The only classification created by the scheme is between the State Transport Undertaking and private transport undertakings, and this classification applies regardless of whether the private undertaking is carried on by an individual, a partnership, a firm or a company. Consequently, the sole question for consideration was whether such a classification infringes the equality clause of the Constitution. Article 14 of the Constitution declares 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 this doctrine of equality has been examined so often that no further exposition is required. It has repeatedly held that Article 14 does not forbid reasonable classification for legislative purposes, but any classification must not be arbitrary; it must be based on differences that have a rational relationship to the purpose sought to be achieved. Applying this principle, the Court observed that the legislature placed the State Transport Undertaking in a class distinct from other undertakings. The issue, therefore, was whether the classification made in Chapter IV‑A of the Act is just and whether it bears a reasonable relation to the object of the legislation.

The Court explained that the object of Chapter IV‑A, as expressed in Section 68C, is to provide, in the public interest, an efficient, adequate, economical and properly coordinated road‑transport service. To realise that objective, Section 68C confers on the State Transport Undertaking the power to prepare a scheme for running the service, whether that scheme involves the complete or partial exclusion of other persons or not. The Court held that the classification has a clear and reasonable nexus to the purpose of the legislation. Ordinarily, a State Transport Undertaking is in a better position than private persons or enterprises to deliver the desired service because it is likely to possess superior administrative, financial and technical capacities. It can procure better‑equipped buses, offer superior amenities to passengers, maintain regular timetables, replace or repair vehicles promptly in emergencies, and employ efficient supervisory staff to ensure a high standard of operation. The Court clarified that it was not suggesting that no individual or private company could run the service efficiently; however, the State, when compared with private operators, is generally better equipped to achieve the legislative goal of improving road‑transport services in all their aspects. Given that the legislature is presumed to understand and correctly appreciate the needs of the people, the Court concluded that the classification between the State Transport Undertaking and other transport service providers has a reasonable basis and is not arbitrary. Nevertheless, the petitioners contended that Section 68C of the Act and other provisions of Chapter IV‑A grant an arbitrary power to the State Transport Undertaking.

In this case the Court examined whether a State Transport Undertaking could discriminate between an individual and the Undertaking itself, between an individual and a private undertaking, or even between one individual and another individual. The Court observed that Chapter IV‑A of the Act, which had previously been considered by this Court in the decision reported as 1959Supp‑1 SCR 319 (AIR 1959 SC 308), created a mechanism intended to keep the State Transport Undertaking within legally defined limits and to prevent it from acting in an arbitrary fashion. Section 68C of the Act was identified as the provision that set out the legislative policy in clear and understandable terms, allowing the State Transport Undertaking to develop a scheme solely for the purpose of providing an efficient, adequate, economical, and properly coordinated road‑transport service.

The Court further explained that the Act required the scheme to satisfy an additional condition that it be necessary in the public interest. Once the scheme satisfied this condition, the Act mandated that it be published with all necessary particulars in the official Gazette, and also in any other manner directed by the State Government. The publication gave persons who were affected by the scheme an opportunity to file objections within a prescribed time‑limit. After receiving the objections, the State Government was required to consider them, to give the objectors or their representatives, as well as the representatives of the State Transport Undertaking, an opportunity to be heard, and then to either approve or modify the scheme. Any scheme that was approved or modified had to be published again. The rules framed under the Act also provided for a personal hearing of the parties concerned.

The Court noted that if the State Transport Undertaking wished to modify an existing scheme, it had to follow exactly the same procedural steps that were prescribed for the original scheme, referring specifically to Sections 68C, 68D and 68E of the Act. From the provisions of Chapter IV‑A, the Court observed that before proposing a scheme the State Transport Undertaking must arrive at its decision on the basis of objective criteria. The Act thereby ensured that all parties affected by the scheme, and the public at large, were given every opportunity to place their objections before the Government. After following the prescribed quasi‑judicial procedure, the Government could either confirm the scheme or modify it. Before a scheme became final, it was subjected to public scrutiny, and its validity and appropriateness were tested through this quasi‑judicial process. Although the Court emphasized that the Government could not be equated with a Court, it held that the procedure laid down in the Act conformed to the principles of natural justice.

The Court rejected the contention that the State Transport Undertaking, being either the State Government itself or a corporation owned or controlled by the State, used the quasi‑judicial procedure merely as a cloak to hide the exercise of absolute and arbitrary power by the Government. The Court stated that Chapter IV‑A could not be described as such a device, because the legislature had made a sincere attempt to protect individual rights as far as possible from arbitrary executive action. Once it was accepted that Chapter IV‑A of the Act was constitutionally sound and that the legislature could validly enact law for the nationalisation of road‑transport services, the Court concluded that the procedure laid down for implementing that policy could not be regarded as unreasonable. The Court further observed that, in any particular case, if the authorities acted in bad faith or colluded to deprive specific persons of their right to engage in road‑transport business, such misconduct could constitute a ground for striking down the particular scheme, but the provisions of Chapter IV‑A themselves could not be invalidated on the ground that they conferred an arbitrary power to discriminate.

In this case the Court observed that if it were shown that the State Transport Undertaking and the Government used their powers to suppress business or to eliminate particular persons from the trade on irrelevant grounds, such findings could justify setting aside the specific scheme. However the Court held that the provisions of Chapter IVA could not be invalidated merely because they appear to give the State Transport Undertaking and the State Government the ability to treat individuals differently from one another, or to discriminate between individuals and State Transport Undertakings, between individuals and private undertakings, or between individuals themselves. The issue of whether such a provision amounted to an arbitrary power had earlier arisen in the case of Saghir Ahmad v. State of Uttar Pradesh, reported in 1955‑1 SCR 707 and AIR 1954 SC 728. That earlier case examined Section 42(3) of the Uttar Pradesh Road Transport Act, 1951 (U.P. Act II of 1951). Section 42(3) exempted the Government from obtaining permits for its own vehicles, thereby allowing it to operate any number of buses without securing permits. The Court noted that, in pursuit of a policy to create a complete State monopoly over road‑transport services, the transport authorities not only cancelled permits that had previously been issued to private operators but also refused to issue new permits to persons who would otherwise have been entitled to them. The constitutional validity of that exemption was challenged.

It is important to mention that the decision in Saghir Ahmad was rendered after the Constitution (First Amendment) Act, 1951, yet the judgment did not rely on that amendment because the pre‑amendment Constitution governed the rights of the parties involved. Addressing the challenge on the basis of Article 14 of the Constitution, Justice Mukherjea, who then sat as a judge of the Supreme Court, made the following observations at page 731 of the SCR report (corresponding to page 740 of the AIR report): there is no doubt that classification is an inherent feature of a monopoly, and when legislation is intended to create a monopoly in favour of the State with respect to a particular business, the State must necessarily be placed in a separate class from ordinary citizens for the purpose of operating that business. He added that such classification bears a rational relation to the object of the statute. Section 3 of the Uttar Pradesh Act further provided that, when the State Government is satisfied that it is necessary in the public interest and for the common good, it may direct that road‑transport services, either generally or for a particular class of service on any route or portion thereof, shall be operated exclusively by the State Government, or jointly with the railways, or partly by the State Government and partly by others, in accordance with the provisions of the Act. The petitioners argued that because the State could select any person it desired to associate with the transport service and because there were no statutory rules to guide the exercise of that discretion, the provision violated Article 14. It was pointed.

In the proceedings the State argued that the discretion granted under Section 3 of the Act was not absolute because it could be exercised only through the issuance of permits in conformity with the Motor Vehicles Act. Accepting this interpretation, the Court held that the State’s discretion was a regulated discretion that had to be guided by statutory rules. However, the Court observed that in the present matter it was unnecessary to resort to a liberal construction of the provisions, because Chapter IVA of the Act expressly set out a complete and, under the circumstances, satisfactory mechanism for reasonably regulating the exclusion of all or part of the private operators from any notified area or route. Accordingly, the Court concluded that the provisions of Chapter IVA of the Act did not offend the equality clause embodied in Article 14 of the Constitution.

The next contention raised by counsel challenged the validity of the scheme on the ground that the Government acted with bias against private bus operators in West Godavari District and had, in effect, predetermined the outcome. The petitions alleged that the Government exercised total control over the Road Transport Corporation, that the entire administration and management of the undertaking were vested in the Government, and that the Chief Secretary of Andhra Pradesh acted as the chairman of the corporation; consequently, the whole scheme, from its conception to its final approval, was essentially a governmental act. On this basis it was contended that the Government had become a judge in its own cause and that its decision was therefore tainted by legal bias. In addition, it was pleaded that a sub‑committee comprising Ministers, Secretaries and officers of related departments, chaired by the Minister in charge of transport, had met on 28 January 1960 and decided that, under the scheme of nationalisation of bus services, the State Government would take over the bus services in West Godavari District and Guntur District before the end of that year. Accordingly, the Minister responsible for the transport portfolio was said to have pre‑determined the issue and thus disqualified himself from deciding the dispute between the State Transport Undertaking and the petitioners. The same questions had been raised in Nageswara Rao v. State of Andhra Pradesh, 1960‑1 SCR 580 (AIR 1959 SC 1376), where it was argued that the Chief Minister, who held the transport portfolio, could not act as a judge in his own cause because of bias against private operators. The Court distinguished between official bias, which arises from the statutory duties imposed on an authority, and personal bias, which favours or disfavors a particular party. After reviewing the relevant English authorities, the Court observed that the decisions demonstrate the principle that official bias inherent in statutory functions does not necessarily amount to prohibited personal bias.

In England, the courts have tolerated a statutory intrusion on the common‑law objection based on bias, but they have limited that intrusion strictly to the confines of the statutory exception. It is appropriate to observe that, because Parliament is supreme in England, a statutory provision remains valid even if it conflicts with the principles of natural justice; by contrast, in India any law enacted by Parliament or by a State Legislature must satisfy the fundamental rights enshrined in Part III of the Constitution. The Court then explained that the provisions of the Act do not permit any breach of natural‑justice principles, because the Act envisions that, when a conflict arises between the transport undertaking and private‑bus operators, the State Government is to act as a judge and resolve the dispute. A similar view was expressed by Justice Shah in Petition No 2 of 1960, dated 28‑April‑1960 (AIR 1960 SC 1073), though using slightly different language. Justice Shah observed that although the Government, which bears the duty to decide the dispute, is effectively a party to the dispute, the Government or any delegated authority may act in a judicial manner when it approves or modifies the scheme, and such approval or modification is not subject to challenge on the basis of a presumed bias. He further noted that when a Minister or a Government officer, empowered to hear objections to the scheme, acts in his official capacity, his decision cannot be questioned merely because he is a part of the Government, unless reliable evidence demonstrates that he is personally biased. In the earlier cases the transport department of the Government itself functioned as the transport undertaking. In the present matter, however, the transport authority is the State Road Transport Corporation, which is a corporate body having perpetual succession and a common seal. Although the Act grants the State Government a degree of control over the Corporation, it cannot be said, either legally or factually, that the Corporation is a department of the State Government. Consequently, when the State Government adjudicates the dispute between the Corporation and the private‑bus operators, it is merely exercising its statutory functions, and the objection raised on this ground lacks merit. Moreover, it cannot be said that the Minister in charge of the transport portfolio acted with personal bias. The mere fact that the Minister chaired the sub‑committee formed to implement the nationalisation scheme for bus services in West Godavari District does not, by itself, establish bias. In the counter‑affidavit filed on behalf of the first respondent, the contents and authenticity of the sub‑committee’s reports published in the Telugu daily “Andhra Patricia” were not admitted. Even assuming that the sub‑committee reached a decision, that decision cannot be regarded as final and irrevocable.

The Court explained that the decision of the sub‑committee was not a decision that contravened the provisions of the Act. It was merely a policy decision, and in the factual circumstances it could only be understood as advice given by the sub‑committee to the State Government to implement a policy of nationalising bus services in the specific district. The Court held that such a decision could not, either expressly or by necessary implication, predetermine the issue; it merely indicated that the policy would be carried out subject to the requirements of the Act. The Court further noted that nothing in the record suggested that the Minister responsible for the transport portfolio harboured any personal bias against any private‑bus operator. Accordingly, the Court concluded that the petitioners had not established that the Minister in charge of the transport portfolio possessed personal bias against the private‑bus operators, and therefore the Minister was not disqualified from hearing the objections filed under Chapter IVA of the Act.

Regarding the next contention, the Court referred to the observations made in the earlier decision reported in 1960‑2 SCR 130 and AIR 1960 SC 350. In that case, after analysing the scope of Section 68C of the Act, Justice Wanchoo observed that the scheme to be framed must be capable of being implemented in its entirety at one time, which is why the Undertaking was given the authority to frame a scheme for an area, a route, or even a portion thereof. He warned that if the Undertaking were permitted to carry out the scheme piecemeal, it could abuse its implementation power, discriminate against some operators in favour of others, and undermine the integrity of the scheme, thereby contravening Section 68E. Relying on those observations, the petitioners argued that the State Government had originally intended to frame a single scheme for the whole district but, being unable to implement it all at once, had split it into seven separate schemes in order to evade the Court’s guidance. The first respondent, in its counter‑affidavit, responded that each scheme had been framed with due regard to the Undertaking’s resources—personnel, material and financial—so that each could be executed fully and 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. The Minister, in his order, also addressed this point, stating that seven distinct schemes had been framed, each being a separate and independent scheme. Under the notification, each scheme, once approved, would come into force on a date to be fixed by the Government, and although different dates might be assigned to each scheme, each

In this matter the Court observed that the Minister’s order expressly provided that each of the seven schemes would be brought into force on a date fixed by the Government and that each scheme would be implemented in its entirety, with no part of any scheme being introduced in a piecemeal manner. The order further specified distinct commencement dates for the different schemes, thereby ensuring that every scheme would operate as a complete unit from the day it became effective. The Court clarified that it has never ruled that a State may not adopt a phased programme for the nationalisation of transport services either within an entire State or within a district, nor has it held that more than one scheme cannot be prepared for a district or a portion of a district. The observations made by the Court concerning piecemeal implementation were intended solely to prevent the abuse of power that might arise if a single scheme were applied inconsistently, favouring some operators while discriminating against others. In the present case, the seven schemes were drafted not to evade the Court’s guidance but precisely to avoid the negative consequences of fragmentary implementation. The Government therefore framed separate schemes for distinct geographic areas of the district and expressly stated that each scheme would be rolled out as a whole on its own commencement date. Accordingly, the Court found no legitimate ground to object to the creation of seven independent schemes.

With respect to the sixth contention, the petitioners challenged the validity of the schemes on the basis that the Chief Executive Officer of the Andhra Pradesh Road Transport Corporation did not possess the authority to publish the schemes, arguing that this deficiency rendered the schemes improperly promulgated. The Court noted that, under Section 68C of the Andhra Pradesh Act, the Andhra Pradesh State Road Transport Corporation had exercised its statutory powers by preparing the schemes and publishing them in the Andhra Pradesh Gazette, Part II, page 1310. The Gazette notification bore the signature of Guru Pershad, who held the position of Chief Executive Officer of the State Transport Undertaking, Andhra Pradesh Road Transport Corporation. The Court then referred to the relevant provisions of the Road Transport Corporations Act, 1950 (Act LXIV of 1950). Section 4 of that Act defines a corporation as a body corporate, notified under Section 3, possessing perpetual succession and a common seal, and capable of suing and being sued in its corporate name. 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 to exercise such powers and perform such duties as the corporation may deem necessary for the efficient day‑to‑day administration of its business, subject to any conditions or limitations specified in the resolution. Section 13 further states that all orders and decisions of a corporation must be authenticated by the signature of the Chairman or any other member duly authorised under that section, while all other instruments issued by the corporation must be authenticated by the signature of the Chief Executive Officer, the General Manager, or any other officer authorized in a similar manner. Relying on these statutory provisions, counsel for the petitioners argued that the preparation and publication of the schemes constituted orders or decisions of the corporation and therefore should have been authenticated by the Chairman or an authorised member in accordance with Section 13, rather than by the Chief Executive Officer. The first respondent, in its counter‑affidavit, replied that the corporation had, by resolution, authorised the Chief Executive Officer to exercise the requisite powers and to perform the duties necessary for efficient administration, and that the Chief Executive Officer, acting under that authority, had published the schemes in the Gazette. The respondent relied on Section 12 of the Road Transport Corporations Act, rather than on Section 13, to support the validity of the Chief Executive Officer’s actions. The Court found no reason to reject the respondent’s statement that a resolution authorising the Chief Executive Officer had indeed been passed in accordance with Section 12(c) of the Act.

In this case the petitioners contended that the preparation and publication of the schemes covered by section 68C of the Act constituted orders or decisions of the Corporation and, consequently, that such orders should have been authenticated by the signature of the Chairman or by any other member who had been duly authorized under section 13 of the Road Transport Corporations Act, rather than by the Chief Executive Officer. In response, the first respondent, through its counter‑affidavit, sought to rebut this contention by stating that the Corporation had, by resolution, authorised the Chief Executive Officer to exercise such powers and to perform such duties as the Corporation might deem necessary for the efficient day‑to‑day administration of its business, and that, relying on that authority, the Chief Executive Officer had published the schemes in the Gazette. The first respondent relied on section 12 of the Road Transport Corporations Act and not on section 13 to support the Chief Executive Officer’s power to publish the schemes. The Court found no reason to reject the first respondent’s assertion that a resolution had indeed been passed by the Corporation in accordance with section 12(c) of the Road Transport Corporations Act. Assuming that such a resolution existed, the only remaining question was whether the act of publishing the proposed schemes framed 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 does not possess statutory power to frame a scheme. Section 68C expressly empowers only the State Transport Undertaking to prepare a schedule and to cause every such scheme to be published in the official Gazette, and also to publish it in any other manner directed by the State Government. Accordingly, the scheme need not be directly published by the Corporation; the Corporation may simply cause it to be published in the official Gazette. The Court regarded the act of publishing in the official Gazette as a ministerial act that involves no exercise of discretion and is merely a mechanical step carried out in the ordinary course of day‑to‑day administration. Viewed in this light, there was no difficulty in concluding that the publication was a purely ministerial function which the Chief Executive Officer, by virtue of the aforementioned resolution, could discharge under section 12(c) of the Road Transport Corporations Act. For the purposes of this case the Court presumed that the Corporation had decided the terms of the proposed schemes and that that decision had been duly authenticated by the Chairman or by any other member authorised by the Corporation for that purpose, while the Chief Executive Officer had merely performed the administrative function of publishing the scheme. Accordingly, the Court held that the Chief Executive Officer was well within his statutory rights to publish the proposed schemes in the Andhra Pradesh Gazette. The next argument, identified as point (7), turned on the provisions of Rule 4 of the Andhra Pradesh Motor Vehicles Rules, the relevant portion of which reads: “The scheme or approved scheme to be published in the official Gazette as required under section 68C or 68D as the case”.

The Court observed that Rule 4 of the Andhra Pradesh Motor Vehicles Rules required each scheme, when published, to contain certain particulars, including the number of vehicles proposed to be operated on each route. In some of the schemes originally prepared, the number of vehicles was not specified for each individual route; instead a single figure was placed in brackets opposite two or more routes. An objection to this practice was raised before the Government. The Minister received the objection, accepted it, and directed that the schemes be amended so that the number of vehicles would be shown separately for each route. Accordingly, the schemes were revised to list the vehicle count for each route individually, and the revised schemes were published in the Gazette on 21 March 1960. The Court held that, after this amendment, the published schemes complied with Rule 4(2) because they now contained the required vehicle numbers for each route. Nevertheless, the petitioners argued that the Minister should have himself fixed the number of vehicles for each route rather than merely ordering the amendment. The record did not show any dispute before the Minister concerning how the single figure should be apportioned among the bracketed routes; the only objection raised was that presenting a single number for multiple routes violated Rule 4. Although the Minister’s order consisted merely of a direction, the actual apportionment of vehicles to the individual routes was effected by the Government, not by the State Transport Authority, since the schemes were published by the State Government rather than by the Chief Executive Officer. The Court presumed that the allocation was carried out with the Minister’s approval and concluded that the objection lacked any merit.

The Court then addressed the next contention, which alleged that Rule 5, framed by the State Government under the power granted by Section 68(1) of the Act, conflicted with Section 68E and was 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.” The Court noted that this note was essentially a verbatim reproduction of the note appended to Rule 5. The issue, the Court said, was whether Rule 5 and the accompanying note were inconsistent with Section 68E. Section 68E provides that any scheme published under subsection 3 of Section 68D may be cancelled or modified by the State transport undertaking at any time, and that the procedure laid down in Sections 68C and 68D must, as far as possible, be followed whenever a modification is proposed as if it were a separate scheme. The Court therefore examined whether the allowance for varying the frequency of service by the State Transport Undertaking amounted to a modification within the meaning of Section 68E.

The Court examined whether changing the frequency of service by the State Transport Undertaking constitutes a modification of a scheme within the meaning of subsection 68E of the Act. It observed that the rule, contrary to the contention of the learned Advocate General of Andhra Pradesh, is not a mere technicality. Under the rule the Undertaking may, taking into account traffic requirements at any time, increase or decrease the number of trips made by existing buses or alter the frequency by adding or removing buses. Such alterations may be effected without consulting the public or hearing any representations. The Court noted that these adjustments are intended solely to provide an efficient, adequate and economical transport service on a particular route, as defined in subsection 68C. When the original schemes are proposed, affected persons may lodge objections seeking an increase or decrease in the number of buses on a specific route, and the Government may consider those suggestions and amend the schemes. However, the rule permits the authority to modify the schemes without any reference to the public or the Government. Counsel for the respondents argued that the accompanying note was intended only for emergencies. The Court rejected this view, holding that the rule and the note are broad enough to allow modification of a scheme for any period, not merely emergencies. Consequently, the Court was of the opinion that the rule grants the Undertaking substantial power to modify a scheme, but such power can be exercised only under subsection 68E in the manner prescribed. The Court declared the rule void and said that the note had been illegally inserted into the schemes. Nevertheless, it declined to hold the entire schemes void, finding that the note could be severed without affecting their structure. Deleting the note left the schemes self‑contained, and there was no basis to conclude that the schemes would not have been framed in their present form had the note been excluded. Accordingly, the Court ordered that the note be removed and held that the remaining schemes were valid.

Turning to the final set of objections, the Court considered the argument that the inclusion of new routes in the schemes was improper because subsection 68C deals only with existing routes. The new routes identified were the stretch from Eluru to Kovvur and the stretch from Nidadavol to Jeelugumilli. Counsel relied on the language of subsection 68C to support the claim that the term “route” referred solely to pre‑existing routes, contending that the phrase “route or portion thereof” indicated an existing route, since a scheme could not be framed for a portion of a proposed route. The Court examined the relevant portion of subsection 68C and concluded that the provision permits a scheme to be framed with respect to any area, any route, or any portion of an area or route. There is no inherent inconsistency between the concepts of “area” and “route,” and a proposed route itself constitutes an area limited to that route. Therefore, the inclusion of new routes within the schemes was not barred by subsection 68C.

The Court examined the language of Section 68C of the Act, which provides that “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… the State transport undertaking may propose a scheme…”. The petitioners contended that the expression “route” in this provision should be interpreted as referring only to an existing route. They argued that the words “route or portion thereof” demonstrate that the provision is limited to a route already in existence, because a scheme could not be framed for a portion of a route that has not yet been proposed. The Court found no merit in that contention. It held that under Section 68C the scheme may be framed with respect to any area, any route, or any portion of an area or a route, and that there is no inherent inconsistency between the terms “area” and “route”. The Court explained that a proposed route itself qualifies as an “area” limited to the stretch of the proposed route. Consequently, a scheme may legitimately propose to operate a transport service on a new route connecting point A to point B, and such a new route would fall within the meaning of “area” under Section 68C. Accordingly, the Court concluded that Section 68C unequivocally empowers the State Transport Undertaking to propose schemes that include new routes. The Court noted that while other points were raised in the affidavits filed before it, those matters were not pursued further. In its final order, the Court directed that the note concerning the frequency of services attached to the schemes be deleted, held that the petitions otherwise failed, dismissed them with costs, and ordered the payment of one set of hearing fees.