Sobhraj Odharmal vs State Of Rajasthan

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

Court: Supreme Court of India

Case Number: Civil Appeal 471 of 1962

Decision Date: 17 September 1962

Coram: J.C. Shah, Bhuvneshwar P. Sinha, Syed Jaffer Imam, N. Rajagopala Ayyengar, J.R. Mudholkar

In this case the Supreme Court of India delivered its judgment on 17 September 1962 in the matter of Sobhraj Odharmal versus the State of Rajasthan. The judgment was authored by Justice C. J. Shah and the bench consisted of Justices C. J. Shah, Bhuvneshwar P. Sinha, Syed Jaffer Imam, N. Rajagopala Ayyangar and J. R. Mudholkar. The petitioner was Sobhraj Odharmal and the respondent the State of Rajasthan. The decision is reported as 1963 AIR 640 and 1962 SCR Supplement (1) 99, with additional citator references. The dispute arose under the Motor Vehicles Act, 1939 (sections 42(1) and 68R) and the Rajasthan State Road Transport Service (Development) Rules 1960, particularly rule 7(4). The factual background concerned a scheme published in the Government Gazette whereby the State Roadways intended to operate a motor‑transport service on the Jaipur‑Kotah route. Sixty‑one private operators who then provided service on that route filed objections to the scheme. The Legal Remembrancer heard the objections and rejected them; the State Government subsequently approved the scheme and re‑published it in the Gazette. A number of the private operators then approached the Rajasthan High Court seeking a writ to quash the scheme. The High Court allowed the petition, set aside the scheme and directed the Legal Remembrancer to rehear the objections. In compliance with that order the Legal Remembrancer sent individual notices by registered post to each of the sixty‑one operators, fixing the date of the hearing, and also published a notice in the Gazette. Only thirteen of the notices were actually delivered; the remaining thirty‑nine were returned as unserved. Nevertheless, the Legal Remembrancer proceeded with the hearing, again rejected the objections, re‑approved the scheme and published the revised scheme in the Gazette. After the re‑approval the Regional Transport Authority issued an order declaring that the State Roadways would operate on the Jaipur‑Kotah route and cancelled the permits of the private operators. The State Roadways commenced operating on the route without possessing permits, although permits were later granted to it. The appellants, who were among the private operators, again moved the High Court for a writ to set aside the scheme, but the High Court dismissed their application. The appellants then appealed to the Supreme Court against the High Court’s order; one of them filed a writ petition alleging that his constitutional right to carry on his business was infringed. The appellants contended that the procedure before the Legal Remembrancer was illegal because notices of the hearing had not been personally served on all the operators. They further argued that rule 7(4) of the 1960 Rules, which presumed that publication of a notice in the Gazette amounted to sufficient intimation to all concerned parties, was itself unlawful. In addition, they claimed that the State Roadways’ operation of vehicles without first obtaining permits violated their fundamental right to practice their trade.

The Supreme Court held that the appellants had indeed been duly served with notice of the hearing before the Legal Remembrancer and that, having received notice, they could not later dispute the scheme after it had been properly published and had become final. The Court observed that the Legal Remembrancer’s view was that even operators who had not been personally served were deemed to have notice of the hearing, and that this view was based on evidence rather than on the presumption contained in rule 7(4). The Court also noted that the High Court had found the objectors to be properly served, and that, following the Supreme Court’s settled practice, it would not disturb such findings. Further, the Court concluded that no constitutional right of the appellants had been infringed. Once a scheme is lawfully made and published, the permits of private operators on the affected route may be cancelled, and the appellants could not challenge the State Roadways’ operation of vehicles, whether or not permits had been obtained. Because the permits of the appellants were lawfully cancelled, their rights were extinguished and no fundamental right remained that could be infringed. Accordingly, the Supreme Court dismissed the appeal.

The Court observed that even operators who had not been personally served with a notice were nonetheless deemed to have received notice of the hearing. It noted that the Legal Remembrancer’s opinion was founded on the material evidence placed before him and that he expressly refrained from relying on the presumption contained in rule 7(4). The High Court, having examined the same circumstances, had also concluded that the objectors had been duly served with notice, and the Supreme Court, adhering to its established practice, did not disturb such findings of fact. The Court further held that no fundamental right of the appellants had been infringed by the actions of the State. It explained that once a scheme is lawfully enacted and published in accordance with the statutory requirements, the permits formerly issued to private operators on the affected route may be validly cancelled, and those operators cannot press a challenge against the State Roadways’ operation of vehicles, whether or not the State possesses a permit. Since the permits of the appellants were lawfully withdrawn, their rights were extinguished and they possessed no remaining fundamental rights that could be said to be violated. The Court went on to state that, upon finalisation of the scheme, the Regional Transport Authority had no discretion but to allocate permits to the State Roadways. In reaching this conclusion, the Court referred to the authorities Abdul Gafoor v. State of Mysore, [1962] 1 S.C.R. 909; Samarth Transport Co. (P) Ltd. v. Regional Transport Authority, [1961] 1 S.C.R. 631; and Kalyan Singh v. State of U. P., [1962] Supp. 2 S.C.R. 76. The judgment formed part of Civil Appeal 471 of 1962, an original jurisdiction civil appeal arising from the judgment and decree dated 9 May 1962 of the Rajasthan High Court in D. B. Civil Miscellaneous Write No. 214 of 1962, and was heard together with Writ Petition No. 66 of 1962 filed under Article 32 of the Constitution for the enforcement of fundamental rights. Counsel for the appellants and petitioner included the Attorney‑General for India, the Solicitor‑General for India and other legal representatives, while counsel for the respondents appeared for both the appeal and the petition. The judgment was delivered on 17 September 1962 by Justice Shah, addressing questions concerning the validity and effect of a scheme approved by the State of Rajasthan under section 68D of the Motor Vehicles Act, 1939. The appeal challenged the scheme on the ground that the appellants were denied a reasonable opportunity to be heard on their objections before the scheme’s approval, and the writ petition alleged that the petitioner’s fundamental right to carry on the business of a motor transport operator was infringed by the State of Rajasthan’s operation of buses on the route without obtaining permits under section 42(1) of the Motor Vehicles Act. The scheme in question, relating to the Jaipur‑Tonk‑Deoli‑Kotah route, had been published on 10 September 1960 in the Rajasthan Government Gazette by Rajasthan State Roadways, a State Transport Undertaking within the meaning of section 68A(b) of the Motor Vehicles Act, 1939, and had attracted objections from sixty‑one persons, including certain holders of stage‑carriage permits authorising them to ply stage carriages on the route.

In this case, the objection to the proposed transport scheme was lodged with the Secretary of the Government of Rajasthan, Transport Department, Jaipur, within the time limit specified by the authorities. The objections were examined by the Legal Remembrancer of the State, who rejected them by an order dated 2 February 1961. Following that rejection, the State Government approved the scheme and published it under section 68D of the Motor Vehicles Act and rule 8 of the Rajasthan State Road Transport Service (Development) Rules, 1960. Several holders of stage‑carriage permits subsequently invoked Articles 226 and 227 of the Constitution and approached the High Court of Rajasthan for writs to cancel the scheme. By an order dated 3 May 1961, the High Court allowed the petition and set aside the scheme. The operative portion of the High Court’s order stated that the approval of Scheme ‘B’ Jaipur‑Kotah by the Legal Remembrancer was quashed and that the authorities were directed to decide the objections of the permit holders on the Jaipur‑Chaksu‑Niwai‑Banasthali‑Tonk‑Deoli route in accordance with the observations made by the Court; further, the Government notification publishing the scheme was also set aside. After that decision, the Legal Remembrancer sent individual notices by registered post, prepaid and addressed to each of the sixty‑one objectors, fixing 26 June 1961 as the date for hearing their objections, and also issued a general notice of the same in the State Government Gazette. Of the sixty‑one notices dispatched, thirteen were duly received by the intended recipients, thirty‑nine were returned unserved, and regarding the remaining nine notices no information was received from the Postal Department as of 19 June 1961. The Legal Remembrancer then commenced hearing the objections, a process that extended from June 1961 to March 1962. During that period fifteen hearings were held at which evidence was recorded and oral arguments were heard. By an order dated 23 March 1962, the Legal Remembrancer approved the scheme subject to certain modifications, and the modified scheme was published in the Government Gazette on 2 April 1962. Subsequently, on 31 May 1962 the Secretary of the Regional Transport Authority, Jaipur, issued an order declaring that the State Road Transport Service would commence operations on the route specified in the scheme from 15 May 1962, and directed that fifty‑five permits described in the order be cancelled. Pursuant to the scheme, the State Transport Undertaking began operating its vehicles on the route without obtaining permits under section 42(1) of the Motor Vehicles Act. Later, applications for permits were filed with the Regional Transport Authority and were granted to the State Transport Undertaking on 28 July 1962. Meanwhile, sixteen persons, hereinafter referred to as the appellants, claimed that they had not received notice of the proceedings before the Legal Remembrancer after the High Court had quashed the scheme, and that the proceedings were remanded. These appellants approached the High Court under Articles 226 and 227 of the Constitution, seeking writs of certiorari to quash the Legal Remembrancer’s order dated 23 March 1962 and all proceedings after 31 May 1961 concerning the scheme.

The appellants moved the High Court for writs of prohibition to restrain the State of Rajasthan, the Regional Transport Authority, the Legal Remembrancer and the Rajasthan State Transport Undertaking from implementing the scheme of nationalisation of the road‑transport service on the disputed route, which had been published in the Rajasthan Government Gazette on 2 April 1962. They also asked that the transport authorities be barred from cancelling any permits issued for plying vehicles on that route and that the Regional Transport Authority be prevented from granting permits to the Rajasthan State Transport Undertaking pursuant to the impugned scheme. In addition, the appellants prayed for a declaration that clause (4) of rule 7 of the Rajasthan State Transport (Development) Rules, 1960 and the public notice dated 30 May 1961, published in the Rajasthan Government Gazette of 31 May 1961, were illegal, null and void, and ultra vires. They further sought a declaration that the proceedings before the Legal Remembrancer had been conducted without giving them a real opportunity to produce evidence or to be heard in accordance with law. The appellants argued that only thirteen of the thirty‑one objectors had been served with notice of hearing, while the remaining forty‑eight had not, and that the reliance by the Legal Remembrancer on the presumption of due service contained in clause (4) of rule 7 therefore rendered the proceeding illegal. The High Court dismissed the petition without directing any rule upon the State or the transport authorities, holding that rule 7(4) was not ultra vires the Motor Vehicles Act and that, on the material placed before it, it was difficult to conclude that the Legal Remembrancer had failed to determine the regularity of service of notice to the objectors before hearing their objections. Against that dismissal, the appellants filed Appeal No. 471 of 1962 in this Court. Separately, one appellant filed a petition under article 32 of the Constitution seeking a writ of mandamus to restrain the State of Rajasthan, the Rajasthan State Transport Undertaking and the Regional Transport Authority, Jaipur Region, from commencing their transport service and from interfering with his right to ply stage‑carriages on the same route under a permit that had originally been valid until 30 November 1963. That petitioner also asked for a writ or direction quashing the resolution dated 3‑4 May 1962 passed by the Regional Transport Authority, which purported to cancel his permits without issuing valid permits to the State Transport Undertaking. The principal ground for that petition was that the State of Rajasthan and the State Transport Undertaking could not lawfully commence plying vehicles on the route without first obtaining valid permits under sections 68F and 42(1) of the Motor Vehicles Act. Under section 68C of the Motor Vehicles Act, 1939 (Act 4 of 1939), a State Transport Undertaking, if it is of the opinion that certain matters specified in the section are satisfied, is authorised to prepare a scheme detailing the nature of the service and the area or route to be covered, and to publish that scheme in the Government Gazette in the manner directed by the State Government.

The statute authorized a person, for certain matters specified in the section, to prepare a scheme that set out the particulars of the nature of the service and the area or route to be covered, and to publish that scheme in the Government Gazette and in any manner directed by the State Government. Persons who were affected by the scheme were permitted to lodge objections within the period prescribed. After receiving the objections, the State Government heard them, giving the objectors an opportunity to support their claims. Following the hearing, the State Government could either approve the scheme or modify it, and once the scheme, whether approved or modified, was published in the official Gazette it became final.

Section 68F(1) required the Regional Transport Authority, notwithstanding any contrary provision in Chapter IV, to issue permits to the State Transport Undertaking for operating vehicles when the Undertaking applied for permits under an approved scheme. Sub‑section (2) of Section 68D provided that, for the purpose of giving effect to an approved scheme in a notified area or route, the Regional Transport Authority could by order refuse to entertain any application for renewal of any other permit, or could cancel or modify an existing permit.

Section 68I gave the State Government the power to make rules to implement the provisions of Chapter IVA, particularly for specific matters listed therein. Pursuant to this power, the Government of Rajasthan framed the Rajasthan State Transport Service (Development) Rules, 1960. Rule 3 specified the authority responsible for preparing the scheme on behalf of the State Transport Undertaking and identified the matters to be included in the scheme. Rule 4 set out the method of publishing the scheme, and Rule 5 dealt with the manner of filing objections. Clause (4) of Rule 5 required that a memorandum of objection contain, among other things, the full name and address of the objector on which notice or order under the Rules could be served.

Rule 7 addressed the procedure for the consideration and disposal of objections. Clause (1) stipulated that objections were to be considered by an officer authorized by the Governor. Clause (2) required that the authorized officer fix the date, time and place for hearing the objections and issue notice of such hearing to the objectors and to the General Manager of the State Transport Undertaking, directing them to appear before the officer. Clause (3) prescribed that the notice under sub‑rule (2) be sent by registered post and posted at least fourteen days before the hearing date. Clause (4) provided that, notwithstanding the requirement of sub‑rule (3), a general notice could also be given regarding the date, time and place of the hearing by publishing it in the official Gazette, and that where such a general notice was issued, it would be presumed that all concerned parties had been duly intimated.

In the matter before the Court, the statutory provisions governing the consideration of objections were explained. Rule 7 dealt with the procedure for hearing objections. Clause (1) required that an officer authorised by the Governor consider the objections. Clause (2) empowered that officer to fix the date, time and place for the hearing and to issue notice of that hearing to the objectors as well as to the General Manager of the State Transport Undertaking. Clause (3) prescribed that the notice required by clause (2) be sent by registered post and that it be posted at least fourteen days before the hearing. Clause (4) added that, notwithstanding the requirement of clause (3), a general notice could also be given by publishing the date, time and place of the hearing in the official Gazette; when such a Gazette notice was issued, it was to be presumed that all parties concerned had been duly intimated. Rule 8 specified the form in which an approved scheme had to be published, and Rule 9 dealt with the consequences of that publication. The appellants asserted that they never received the individual notices that were purportedly sent to them by registered post, and that they “did not at all come to know about the hearing or the decision of the aforesaid objections by the Legal Remembrancer till the approved scheme relating to the Jaipur‑Tonk‑Deoli‑Kota route was published in the Rajasthan Government Gazette dated 2 April 1962.” The Court noted that, under section 68D(1), an objector must be given a reasonable opportunity, which includes advance notice of the date, time, place and the designation of the authority who will hear the objections. Accordingly, the authority hearing the objections must give notice that affords the objector a reasonable chance to appear and to substantiate his objections. The appellants argued that because the registered‑post notice was never actually delivered, the subsequent Gazette publication did not constitute a reasonable opportunity to substantiate their objections. They further contended that clause (4) of Rule 7, which creates a presumption of service on Gazette publication, was invalid because the State Government could not deprive objectors of a reasonable hearing by relying solely on that presumption.

The Court observed that it was unnecessary to address the broader question raised at the Bar about whether a notice sent by registered post combined with a general Gazette notice, pursuant to clause (3) and clause (4) of Rule 7, must invariably be regarded as affording a reasonable opportunity. The record showed that sixty‑one objectors had originally filed objections before the Legal Remembrancer. Those objectors had appeared before the Legal Remembrancer and objected to the scheme. Although the Legal Remembrancer initially approved the scheme, the High Court set aside that approval in several petitions and remanded the matter to the Legal Remembrancer for fresh hearing of the objections. The appellants admitted that they were aware of the High Court proceedings challenging the scheme and of the order directing the remand. However, they maintained that after the remand order they “did not receive any notice of the hearing pursuant to the order of remand” and that they remained unaware of the subsequent proceedings before the Legal Remembrancer until the scheme was finally published by the Government of Rajasthan. This contention formed the basis of the appellants’ claim that they were denied a reasonable opportunity to be heard.

The Legal Remembrancer was the authority responsible for determining whether the objectors had received adequate notice of the proposed scheme. There is no evidence that he relied on the presumption of service that arises from publication of a notice under rule 7(4). He was informed that individual notices sent by registered post had been received by only thirteen of the objectors. Accordingly, he had to decide whether a hearing on the objections could be lawfully commenced. When the hearing began, the Legal Remembrancer was aware of several material facts concerning the objections. First, all objectors were cognizant of the High Court proceedings and the order that had been issued there. Second, the Legal Remembrancer had directed individual notices under rule 7 clause (3), and those notices had been duly dispatched. Third, a general notice concerning the proposed scheme had also been published in the Government Gazette, as required by the regulations. Fourth, the scheme in question was an integrated scheme affecting a route on which the objectors operated stage carriages. Fifth, the objectors had a vital interest in continuing to ply their buses, and the publication of the scheme posed a serious threat to their business. It is also evident that the Legal Remembrancer had to deal with motor vehicle operators, a class of persons who must constantly consult the State Government Gazette for relevant rules. The Gazette publishes the rules framed under the Act, the schemes, notices and directions issued by the Government for acquiring control over road transport. The order sheet dated June 19, 1961 contains no reference to the presumption that arises under rule 7(4). The Legal Remembrancer appears to have been of the opinion that those who had not been personally served with individual notices still had notice that the proceeding would commence on June 26, 1961. This inference, however, cannot be said to be without any evidential basis, as the circumstances indicated that the general notice was likely to inform them.

The High Court also held that the Legal Remembrancer was satisfied that the notice had been served on the objectors in accordance with the law. The High Court further concluded that the Legal Remembrancer acted according to law in proceeding to hear the objections. The finding that the objectors were duly served with notice was a factual determination, and according to the settled practice of this Court, such a finding is not open to interference. Consequently, if the objectors were properly served and nevertheless failed to appear to present their objections before the Legal Remembrancer, they cannot later challenge the scheme. The scheme had already been duly published and, by operation of the statute, was declared final. The Court then considered whether any fundamental right of the petitioner in the writ petition, specifically the right to carry on business, had been infringed. The alleged infringement concerned the State Transport Undertaking operating its vehicles without obtaining permits under section 42(1). The scheme had been issued by an order dated March 23, 1962, of the Legal Remembrancer, who was invested with the authority to hear objections to it.

In this case the scheme was approved on 23 March 1962 by the Legal Remembrancer, who was authorised to consider objections to it. After approval, the scheme was published in the Government Gazette. The publication directed that the permits of fifty‑five operators, including the petitioner, on the route in question should be cancelled. Acting under the authority conferred by section 68F of the Motor Vehicles Act, the Regional Transport Authority (RTA) issued the cancellation orders in accordance with the scheme. Section 68F contains two separate clauses. Clause (2) empowers the RTA to take action or to make orders that give effect to the scheme; this power does not depend on whether any permit has been granted to the State Transport Undertaking (STU). Clause (1), by contrast, imposes a statutory duty on the RTA to grant a permit to the STU whenever the STU makes an application in pursuance of an approved scheme. When such an application is made, the provisions of Chapter IV, including sections 47, 48, 57 and related sections, are not applicable. The Court relied on the decision in Abdul Gajoor v. State of Mysore, observing that the STU must obtain a permit from the RTA for the transport service contemplated by the approved scheme. Section 68F(1) requires the STU to apply for the permit in the manner prescribed by Chapter IV, and then obliges the RTA to issue the permit “notwithstanding anything to the contrary contained in Chapter IV.” The Court held that section 57(3) has no relevance to the matters dealt with by section 68F(1). Accordingly, the RTA has no discretion to refuse a permit once the application conforms to the approved scheme and follows the Chapter IV procedure. The RTA’s duty is simply to examine the application to confirm it meets the scheme and the procedural requirements; it does not need to consult the public or existing permit holders, who have no role in this process.

The Court further explained that subsection (2) authorises the RTA to make orders necessary to implement the scheme and to give effect to its directions. In Samarth Transport Co. (P) Ltd. v. The Regional Transport Authority, Nagpur, the Court observed that the power under clause 2(a) of section 68F does not depend on the STU filing an application for a permit. The power becomes exercisable when the authority is made aware that an approved scheme exists and must be given effect, and consequently renewal applications cannot be entertained. The Court also cited Kalyan Singh v. State of Uttar Pradesh, where it was held that an order issued by the RTA under section 68F(2) after a duly approved and published scheme is purely consequential upon that scheme and is not open to challenge. The Court noted that the scheme itself left the RTA with no discretion; the scheme expressly restricted the appellant’s right, and once the scheme became final and binding, the RTA had no authority to permit the continuation of the previously granted permits.

In discussing the circumstances in which the authority under section 68‑F(2)(a) could be exercised, the Court observed that the power did not require the State Transport Undertaking to submit a formal application for a permit. The power could be invoked as soon as the authority became aware that an approved scheme existed, and, to give effect to that scheme, any application for renewal could not be entertained. The Court then referred to the decision in Kalyan Singh v. State of Uttar Pradesh, where it was held that an order issued by the Regional Transport Authority under section 68‑F(2) on the basis of a direction contained in a duly approved and published scheme was merely a consequence of that scheme and could not be challenged. While examining clause (2) of section 68‑F, the Court noted that the scheme left the Regional Transport Authority with no discretion; the scheme itself restricted the appellant’s right, and once the scheme became final and binding, the authority had no power to allow the appellant to operate his vehicles. The Court further explained that when the appellant’s right to ply his buses was lawfully extinguished, he could not maintain an appeal against the State Transport Undertaking’s right to operate its buses, whether or not it held permits. The Court emphasized that no fundamental right of the appellant was infringed by the State Transport Undertaking’s operation of buses without permits, and that a petition under article 32 of the Constitution could be entertained only if a fundamental right of the petitioner had been violated. Consequently, the Court held that if a valid scheme contained a directive for the cancellation of existing permits and the Regional Transport Authority accordingly cancelled those permits, the operator whose permits were cancelled could not contend that the State Authority, which began operating its vehicles without obtaining permits under section 42 of the Motor Vehicles Act, infringed the operator’s right to conduct his business. The operator’s right had been lawfully extinguished pro tanto by the scheme and the subsequent order under section 68‑F(2), and therefore the operator was not entitled to approach this Court under article 32 for protection of the alleged right. The scheme had been duly published, and the permits that had been issued to fifty‑five operators, whose names were listed in the order dated 3‑4 May 1962, were lawfully revoked. Since the objectors no longer possessed any fundamental right that could be infringed by the State Government’s operation of its vehicles, whether or not it held permits issued by the Regional Transport Authority under section 42(1) of the Motor Vehicles Act, the appeal and the writ petition were dismissed with costs. A single hearing fee was ordered, and both the appeal and the writ petition were dismissed.