Nehru Motor Transport Cooperative... vs The State Of Rajasthan And Others

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

Court: Supreme Court of India

Case Number: Writ petition No. 142 of 1962

Decision Date: 14 December 1962

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.C. Das Gupta, J.C. Shah

In the matter titled Nehru Motor Transport Cooperative Society Ltd. and others versus the State of Rajasthan and others, the decree was rendered on 14 December 1962 by the Supreme Court of India. The decision was authored by Justice K.N. Wanchoo, who sat with Justices Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.C. Das Gupta and J.C. Shah. The petitioners are identified as Nehru Motor Transport Cooperative Society Ltd. together with additional appellants, while the respondents are the State of Rajasthan and other named parties. The judgment bears the citation 1963 AIR 1098 and 1964 SCR (1) 220, and it has been referenced in subsequent reports such as RF 1967 SC 1815, RF 1981 SC 660, and R 1992 SC 1888. The statutory framework discussed includes provisions of the Motor Vehicles Act, 1939 (sections 68C and 68D(3)), the Rajasthan State Road Transport Services Development Rules 1960 (rule 3), and the constitutional provisions of Articles 14 and 32.

The petitioners were owners of stage‑carriage permits on the Jodhpur‑Bilara and Bilara‑Beawar routes. The Rajasthan Roadways issued a draft scheme that intended to acquire the transport service on the Jodhpur‑Bilara‑Beawar‑Ajmer corridor, and it further sought to take over three specific overlapping routes that lay entirely on the Jodhpur‑Bilara‑Beawar‑Ajmer road. The draft scheme named the permit‑holders for those three overlapping routes and stipulated that their permits would be cancelled and that no other vehicles would be permitted to ply on the taken‑over sections. The petitioners objected to the draft scheme on the basis of discrimination, alleging that certain overlapping routes had not been notified. The objection was presented before the Legal Remembrancer, who nevertheless held that, despite the omission of those routes from the draft and the absence of any notice to the affected permit‑holders, he was authorised to render the permits ineffective with respect to the unnotified routes and consequently issued orders to that effect. The permit‑holders aggrieved by the Legal Remembrancer’s orders filed writ petitions in the High Court. The High Court directed the Legal Remembrancer to reconsider the matter and instructed him to defer consideration of the twelve partially overlapping routes for inclusion in a later scheme. In light of the High Court’s directive, the Legal Remembrancer’s subsequent decision left out all twelve partially overlapping routes from the scheme, affecting only the three routes that had been expressly mentioned in the draft. The present petition challenges the Legal Remembrancer’s decision to approve the modified scheme, which was published on 31 August 1962. The petitioners advanced several grounds before this Court: (i) that approving one part of the scheme at one time and another part later violated procedural law; (ii) that the Legal Remembrancer’s approval after purportedly abandoning his own judgment was invalid; (iii) that a fresh hearing should have been granted to the objectors from the beginning; (iv) that the hearing afforded was inadequate; and (v) that the scheme operated in a discriminatory manner against the operators of the twelve partially overlapping routes.

The Court held that the twelve partially overlapping routes had never been placed in the draft scheme, and therefore the approval that was later given to the final scheme, which left those routes untouched, could not be described as an approval of only a part of the scheme. The Court further observed that the order issued by the High Court in the proceedings functioned in the same way as a remand order. Because of this character, the decision rendered subsequently by the Legal Remembrancer was to be treated as a fresh decision rather than as a review of his earlier decision, and consequently there was no abdication of his functions. In the same vein, the Court ruled that the objectors had already been afforded a full opportunity to present evidence on the earlier occasion, and that the material they had produced remained available for the Legal Remembrancer to consider. That opportunity, the Court said, satisfied the requirement of a proper hearing of the objectors’ arguments, and the fact that the High Court’s order was essentially a remand meant that any objection on this ground could not succeed.

The Court also held that the absence of a provision in the Rules for a coercive process to compel the attendance of witnesses did not preclude the holding of a proper hearing. Moreover, the Court found that under section 68C of the Motor Vehicles Act the State Government possessed the authority to take over any area or route, either wholly or partially, thereby excluding other persons from that route. Accordingly, the Court concluded that there was no discrimination in the present case because routes that were completely taken over stood on a different legal footing from those that were only partially covered by the takeover. The judgment was delivered in the original jurisdiction of a writ petition numbered 142 of 1962, filed under article 32 of the Constitution for the enforcement of fundamental rights. Counsel for the petitioners appeared on their behalf, while counsel for the respondents, including the Solicitor‑General of India, represented the State. The judgment was pronounced on 14 December 1962 by Justice Wanchoo.

The petition challenged the constitutionality of a scheme finalized under section 68D(3) of the Motor Vehicles Act, No. IV of 1939, as it applied in the State of Rajasthan. The petitioners were holders of stage‑carriage permits for the Jodhpur‑Bilara and Bilara‑Beawar routes. A draft scheme had been published on 26 January 1961 under section 68C of the Act by the Rajasthan Roadways, a State Transport Undertaking. That draft scheme provided for the takeover by the Roadways of the transport service on the Jodhpur‑Bilara‑Beawar‑Ajmer corridor. In addition, the draft scheme specified the takeover of three overlapping routes wholly situated on that corridor—namely Jodhpur‑Bilara, Bilara‑Beawar, and Beawar‑Ajmer. Pursuant to rule 3 of the Rajasthan State Road Transport Services (Development) Rules, 1960, the draft scheme also listed the names of the permit holders on those three overlapping routes whose permits were to be cancelled. The scheme further stipulated that no transport vehicles other than those owned by the Roadways were to ply on the taken‑over routes.

In response to the draft scheme, a period was allotted for any person whose interests might be affected to file objections. The petitioners, who were the holders of stage‑carriage permits, filed objections under section 68D of the Motor Vehicles Act. Those objections were considered by the Legal Remembrancer of the Government of Rajasthan, who had been designated as the authority to hear and determine such objections. The objectors sought to adduce evidence and produced several witnesses in support of their case. However, a number of witnesses who had been served with summonses failed to appear before the Legal Remembrancer. The objectors then requested that the Legal Remembrancer employ coercive processes to compel the absent witnesses to attend. The Legal Remembrancer declined to issue any such process, stating that the office did not possess the power to issue coercive measures. Because the objectors were unable to produce additional witnesses, the hearing proceeded on the basis of the evidence already presented, and the Legal Remembrancer delivered his final decision on 31 May 1962. During the hearing, one of the principal arguments advanced before the Legal Remembrancer concerned the existence of approximately a dozen other routes that overlapped, at least in part, with the Jodhpur‑Bilara‑Beawar‑Ajmer corridor but were not specifically addressed in the draft scheme. The petitioners contended that the omission of those routes rendered the scheme discriminatory. It should be noted that the twelve overlapping routes were not entirely co‑terminous with the corridor to be nationalised; nevertheless, the vehicles operating on those routes were required to traverse a portion of the Jodhpur‑Bilara‑Beawar‑Ajmer road. Representing the Roadways, counsel argued that the intention of the scheme was to invalidate the permits on those twelve routes to the extent that they intersected the corridor slated for takeover, even though the draft scheme named only the three routes that were wholly covered by the corridor. No formal notice, according to the petitioners, had been served on the seventy‑two permit holders whose routes were only partially overlapping. The Legal Remembrancer, however, held that despite the absence of a specific mention of those routes in the draft scheme and notwithstanding the lack of notice, he possessed the authority to render the permits ineffective with respect to the overlapping portions, and accordingly he issued orders to that effect.

Following the Legal Remembrancer’s orders, five writ petitions were instituted before the Rajasthan High Court. The petitions were filed by permit holders whose interests were affected in two different ways: some of the petitioners were owners of permits on the three routes that had been expressly identified and notified in the draft scheme, while others were operators of permits on the twelve partially overlapping routes that had not been mentioned in the draft scheme but had nevertheless been impacted by the Legal Remembrancer’s orders. Before the High Court, the petitioners advanced two principal grounds challenging the validity of the scheme that had been formally published on 16 June 1962. The first ground asserted that, in promulgating the scheme as required by section 68D(3) of the Motor Vehicles Act, the State Government introduced modifications that went beyond the decision rendered by the Legal Remembrancer. The petitioners argued that such unilateral alterations were impermissible and consequently rendered the final published scheme invalid because the State Government was not authorised to alter the scheme after it had been approved by the Legal Remembrancer. The second ground was raised on behalf of the operators of the twelve partially overlapping routes. It contended that, since those routes had not been listed in the draft scheme and the permit holders had not received any notice, the Legal Remembrancer lacked the jurisdiction to affect their rights by issuing orders that effectively nullified their permits. These two contentions formed the basis of the challenge brought before the High Court.

It was held that the Legal Remembrancer did not have authority to affect the interests of the permit‑holders whose routes were omitted from the draft scheme and about whom no notice had been given. The High Court accepted both of the contentions raised by the petitioners. The Court expressed the view that the State Government was not empowered to alter the decision of the Legal Remembrancer and, because such a modification had been made, the final scheme that had been published was illegal. The Court further ruled that, since the twelve partially overlapping routes had not been included in the draft scheme and the permit‑holders of those routes had not received any notice, the Legal Remembrancer could not lawfully issue any orders affecting them. Accordingly, the Court set aside the scheme that had been published under section 68D(3) of the Act. In its final observation, the Court noted that the published scheme was not the same as the scheme approved by the Legal Remembrancer and, although the Legal Remembrancer’s decision becomes final upon publication, the Court found that he nevertheless retained the power to amend his own decision even after signing and pronouncing it. Consequently, the Legal Remembrancer was instructed to revisit the matter and to defer consideration of the twelve partially overlapping routes to a later scheme. The Court therefore annulled the final scheme issued under section 68D(3) of the Act and directed the Regional Transport Authority not to implement that scheme until it was regularised in accordance with the law. After the High Court’s judgment, the matter was returned to the Legal Remembrancer, who examined the draft scheme in light of the Court’s decision and, after hearing further arguments, disposed of the objections. The effect of his subsequent decision was that all twelve partially overlapping routes were excluded from the scheme, and only the three routes that had been fully covered by the Jodhpur‑Bilara‑Beawar‑Ajmer corridor and had been notified in the draft scheme remained affected. The Legal Remembrancer’s approval of the amended scheme was published on 31 August 1962, and the present petition challenges that decision. The petitioners contend that the decision of the Legal Remembrancer is invalid for several reasons: (1) a draft scheme under the Act must be approved in its entirety and the practice of approving part of the scheme at one time and another part later is unlawful, so the Legal Remembrancer’s approval does not amount to a legal approval of the scheme; (2) the Legal Remembrancer was not authorised to revisit his order dated 31 May 1962 even after the High Court’s judgment, and by doing so in compliance with that judgment he abandoned his own judgment, rendering any subsequent approval legally ineffective; (3) because the High Court set aside the scheme published on 16 June 1962, the Legal Remembrancer was required to conduct a fresh hearing from the beginning for the objectors, which he failed to do, making his later approval invalid.

The petitioners contended that after the High Court set aside the scheme published on 16 June 1962, the Legal Remembrancer was obligated to conduct a fresh hearing from the beginning for the objectors, an obligation that he allegedly failed to fulfil. Consequently, they argued that the approval given by the Remembrancer to the draft‑scheme after the High Court’s judgment could not be considered a lawful approval. The petitioners further asserted that a hearing under the statute requires the taking of evidence, but the Legal Remembrancer had expressed inability to compel witnesses to attend. Because no proper hearing as envisaged by law was held, the approval of the draft‑scheme without such a hearing was claimed to be invalid. Additionally, the petitioners raised a claim of discrimination, stating that the operators of twelve routes that only partially overlapped the Jodhpur‑Bilara‑Beawar‑Ajmer corridor were excluded from the scheme. Regarding the first two grounds, the Court observed that a draft‑scheme must be considered in its entirety and that every objection to it must be resolved before the State Government or the appointed officer can approve it. The Act does not permit the approval of only a part of the scheme while leaving another part unenforced, nor does it contemplate a two‑stage approval process. The Court also noted that the Act does not provide for a review of the Remembrancer’s approval once it has been granted, although the Remembrancer may correct clerical errors. While the Remembrancer must exercise his own judgment when evaluating objections, he remains subject to any legal directions the High Court may issue concerning questions of law relating to a particular draft‑scheme.

The Court further held that the present case does not involve an approval of a portion of the draft‑scheme with another portion left pending, nor does it involve a scenario where the Legal Remembrancer abdicated his judgment or reviewed his earlier decision after the High Court set aside the scheme under section 68D (3) of the Act on 16 June 1962. To determine the scope of the draft‑scheme, the Court examined its purpose. The scheme was published to effect the takeover of the Jodhpur‑Bilara‑Beawar‑Ajmer route and also to incorporate three completely overlapping routes—Jodhpur‑Bilara, Bilara‑Beawar, and Beawar‑Ajmer—as well as any portions of these routes that lie wholly on the Jodhpur‑Ajmer road. The draft‑scheme made no mention of “partially overlapping” routes, which are routes where only a segment coincides with the Jodhpur‑Bilara‑Beawar‑Ajmer road. Such partially overlapping routes fall into two categories: in some, one terminus is on the main road while the other is off it; in others, neither terminus is on the main road, though a segment of the route does. Rule 3 of the Rules requires that all overlapping routes intended to be affected be identified in the draft‑scheme. In the present case, the draft‑scheme identified only the three routes that are wholly on the main road and did not address the twelve partially overlapping routes.

In the draft scheme, only the three routes that lay entirely on the Jodhpur‑Bilara‑Beawar‑Ajmer road – namely Jodhpur‑Bilara, Bilara‑Beawar and Beawar‑Ajmer – were listed, and the scheme made no reference at all to any other routes whose overlap with the road was only partial. Consequently, the Court considered it unnecessary to raise the issue of the twelve partially overlapping routes while examining the objections presented to the draft scheme. The Department of Roadways was evidently responsible for creating the confusion, because it had apparently urged that, at the first stage of consideration, those partially overlapping routes were also intended to be covered by the scheme, even though the draft scheme failed to mention them as required by rule 3 of the Rules and no notice had been given to the permit‑holders of those routes.

The petitioners subsequently raised a specific point concerning these overlapping routes, and on that first occasion the Legal Remembrancer held that, notwithstanding the fact that the routes were not included in the draft scheme and that no notice had been served upon the permit‑holders, he was nevertheless empowered to pass orders affecting them. Accordingly, he proceeded to render the overlapping portions of the twelve routes ineffective. A careful reading of the draft scheme makes it clear that those twelve partially overlapping routes were not incorporated at all; they were introduced into the controversy solely because the petitioners objected and the Roadways replied that the routes were meant to be covered. When the writ petitions were decided, the High Court observed that the scheme had initially omitted the partially overlapping routes and further observed that, had the Legal Remembrancer decided to include those routes, he should have issued notice to all interested parties to permit the filing of objections. The Court, however, disagreed with that observation. Since the scheme plainly excluded the partially overlapping routes – a fact that remained true regardless of the objections raised or the Roadways’ position before the Legal Remembrancer – it was not within the Legal Remembrancer’s power to add those routes to the scheme, even if he had issued notice to the permit‑holders. The question, therefore, whether the final approval of the draft scheme published on 31 August 1962 amounted to approval of only a portion of the scheme, leaving another portion unapproved and thus susceptible to later enforcement, admits of only one answer: the approval was of the scheme in its entirety. Accordingly, the petitioners’ contention that part of the scheme had been approved while the remainder had not been approved could not stand on the facts of the present case.

In this case, the Court observed that twelve routes which overlapped with other routes were never intended to be covered by the scheme and therefore remained unaffected. The petitioners argued that only a portion of the scheme had received approval because those overlapping routes were not rendered ineffective, but the Court noted that because the overlapping routes were never included in the draft scheme, the approval of the draft scheme that omitted them could not be characterised as a partial approval. The Court further rejected the contention that the Legal Remembrancer had abdicated his judgment when he reconsidered the matter after the High Court’s decision. The order dated 17 August 1962 demonstrated that the Legal Remembrancer had undertaken a full reconsideration of the entire issue after hearing additional arguments and had exercised his own independent judgment in finally approving the draft scheme with certain modifications. In effect, the Legal Remembrancer re‑appraised the evidence in light of the legal position articulated by the High Court, and the Court found no merit in the claim that this constituted a mere review of his earlier order of 31 May 1962. The earlier order had, in fact, been rendered ineffective because the High Court had set aside the final scheme published on 16 June 1962, and consequently there was no operative order to be reviewed. Although the subsequent publication introduced further alterations to the scheme approved by the Legal Remembrancer, the Court held that those changes did not alter the essential consequence that the High Court’s setting aside of the 16 June 1962 scheme also terminated the effect of the 31 May 1962 order. The argument that the High Court’s observation—that the scheme finally published on 16 June 1962 was not the Legal Remembrancer’s decision because the State Government had introduced changes—rendered the scheme open to further modification was rejected as inaccurate. Even if the State Government lacked authority to amend the Legal Remembrancer’s decision, the High Court’s annulment of the final scheme implied that the Legal Remembrancer’s earlier decision was likewise extinguished, since the final scheme was undeniably based on that decision despite the additional modifications at publication. The Court likened the High Court’s order to a remand in ordinary judicial practice, emphasizing that the Legal Remembrancer’s subsequent action was a fresh decision taken after the High Court had set aside the earlier scheme.

In the second instance, the Legal Remembrancer re‑examined the evidence in accordance with the legal principles articulated by the High Court. Accordingly, the decision issued by the Legal Remembrancer on 17 August 1962 cannot be characterized as a mere review of his earlier determination dated 31 May 1962; rather, it must be regarded as a new, independent decision rendered after the High Court had set aside the final scheme that had been published on 16 June 1962. While the proposition advanced on behalf of the petitioners may be acknowledged as correct in abstract, the Court found no basis for applying the principles embedded in those propositions to the factual matrix of the present case. Consequently, the contention that the scheme finally published on 31 August 1962 is void because it conflicts with those principles was rejected. The petitioners further submitted that, after the High Court annulled the scheme of 16 June 1962, the Legal Remembrancer ought to have conducted an entirely fresh hearing from the outset, a step they claimed was omitted. They also argued that the Rules contain no provision for compelling the attendance of witnesses that an objector might wish to produce, rendering any hearing of the objection ineffective and, therefore, invalidating the scheme published on 31 August 1962. It is not contested that the Legal Remembrancer did afford a hearing to the objectors following the High Court’s order. However, the petitioners maintained that the objectors should have been permitted to present fresh evidence before the Legal Remembrancer finally disposed of the objections. The Court is of the opinion that, although the High Court’s order set aside the Legal Remembrancer’s order of 31 May 1962, it did not erase the evidence that the objectors had previously furnished before the Legal Remembrancer on the first occasion. The two grounds on which the High Court set aside the scheme of 16 June 1962 were unrelated to that evidence. In the Court’s view, the Legal Remembrancer was entitled to take that existing evidence into account and was under no obligation to require a new round of evidence when no new issues had arisen. Moreover, the Legal Remembrancer was not bound to solicit fresh evidence merely because the scheme of 16 June 1962 had been struck down on account of certain technical and legal defects. Since the objectors had already been given a complete opportunity to lead evidence on the earlier occasion, that evidence remained available for the Legal Remembrancer’s consideration. It was therefore sufficient for the Legal Remembrancer to hear the objectors’ arguments in full after the High Court’s order, bearing in mind the observations made by the High Court. Accordingly, the petitioners could not sustain any grievance on the ground that they were denied a proper hearing.

It was alleged that the objectors did not receive any hearing after the High Court’s order. The Court noted that the order issued by the High Court functioned as a remand order, and therefore the objection that no hearing followed was untenable. The contention that the Rules do not contain a provision for compelling witnesses to attend was also addressed. The Court explained that proceedings before the Legal Remembrancer are quasi‑judicial and are not identical to ordinary court proceedings. In this type of proceeding, the failure of a summoned witness to appear can be interpreted as a voluntary decision not to give evidence, which is why the Rules do not prescribe a coercive mechanism. The Court held that, given the circumstances of the hearing before the Legal Remembrancer, it was sufficient for the Remembrancer to take testimony from witnesses who were voluntarily presented by the objectors and to assist in securing their attendance by issuing summonses. The absence of a coercive power in the Rules does not imply that a proper hearing cannot be conducted in the special context of the Legal Remembrancer’s inquiry. Consequently, the Court concluded that the Legal Remembrancer did, in fact, provide a hearing to the objectors after the High Court’s order, and that the hearing thereby conducted was both proper and adequate. For this reason, the challenge to the validity of the scheme published on 16 June 1962 on the ground of denial of a hearing was rejected.

The discussion then moved to the allegation of discrimination. The argument was based on the observation that twelve routes, which only partly overlap the road taken over, were left untouched by the scheme, whereas three routes that fully overlapped the taken‑over road were entirely excluded. The Court agreed that the twelve routes were indeed partially overlapping and that in some of those routes one terminus lay on the Jodhpur‑Bilara‑Beawar‑Ajmer road while the other terminus did not; in other cases, neither terminus was on that road and only a segment of the route overlapped it. The petitioners claimed that because the permit‑holders on the partially overlapping routes were not affected, while the permit‑holders on the fully overlapping routes were wholly excluded, discrimination existed. The Court found that this difference did not amount to discrimination. It pointed out that Section 68C permits the State Government to acquire any area or route, even if such acquisition results in the complete or partial exclusion of certain persons. Accordingly, the State Government was within its authority to acquire only the specified route and to exclude those who operated entirely on that route or on portions of it, unless it could be shown that similarly situated persons were treated differently. Accordingly, no ground for a finding of discrimination was identified.

If other permit‑holders whose routes were not included in the scheme have not been excluded, the allegation of discrimination cannot arise. In our view, it is inaccurate to treat permit‑holders whose routes were entirely subsumed by the taken‑over route as comparable to those whose routes were only partially overlapped. The law permits the State to exclude, at the first stage, those permit‑holders whose entire routes fall within the portion being taken over. When such exclusion is lawful, it does not constitute discrimination because a clear distinction exists between routes wholly covered and routes merely partially covered by the acquisition. We have been informed that, after the scheme received approval, authorities also rendered permits ineffective for the overlapping sections of routes that were only partially covered. Nevertheless, this later step does not create a basis for sustaining the discrimination claim, since the fundamental difference between fully covered and partially covered routes remains. The statutory provision allowing partial or total takeover confirms that the legislature intended to differentiate between complete and partial route inclusions. Accordingly, the contention that the final scheme, published on August 31, 1962, is void for discrimination must be rejected. Consequently, we dismiss the petition, we issue no order as to costs, and the petition is hereby dismissed.