Shri Roshanlal Gautam vs State Of Uttar Pradesh And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 800 of 1964

Decision Date: 26 October 1964

Coram: M. Hidayatullah, P.B. Gajendragadkar, K.N. Wanchoo, Raghubar Dayal, J.R. Mudholkar

In the matter of Shri Roshanlal Gautam versus the State of Uttar Pradesh and others, the Supreme Court delivered its judgment on 26 October 1964. The opinion was authored by Justice M. Hidayatullah and was pronounced by a bench consisting of Justices M. Hidayatullah, P. B. Gajendragadkar, K. N. Wanchoo, Raghubar Dayal and J. R. Mudholkar. The petitioner, Shri Roshanlal Gautam, challenged a scheme framed by the Government of Uttar Pradesh that nationalised road‑transport services in the Agra region and prohibited private operators from running services on certain specified routes. After the petitioner’s writ petition was dismissed by the High Court and a subsequent Letters Patent Appeal also failed, the petitioner obtained special leave to appeal before this Court.

The petition raised three principal contentions. First, it was contended that the scheme was essentially a repetition of an earlier scheme enacted under paragraph A.3 of the Uttar Pradesh Road Transport (Development) Act, 1955, a scheme that the High Court had struck down; the petitioner argued that the requirements of section 68C of the Motor Vehicles Act differed substantially from those of section 3 of the Uttar Pradesh Act and that the present scheme did not satisfy the former. Second, the petitioner submitted that section 68C imposed on the State an obligation to provide an “adequate” transport service to replace those already operating, yet the scheme provided for only sixteen contract‑carriage services, a number that could be altered at will, leaving the scheme perpetually vulnerable to challenge. Third, the petitioner asserted that the scheme was improperly framed because it permitted contract‑carriage operations on particular routes while excluding the petitioner, who held a permit for an entire area irrespective of any specific route.

The Court held that the appeal must be dismissed. In addressing the first contention, the Court observed that although section 68C expressly refers to an “efficient, adequate, economical and properly coordinated road transport service” pursued “in the public interest,” the Uttar Pradesh Act merely mentions the “interest of the general public,” “subserving the common good,” or “maintaining and developing an efficient transport system.” The Court emphasized that it would be erroneous to assume that the Uttar Pradesh government would disregard concepts of adequacy, economy, or proper coordination in its pursuit of the common good and the development of an efficient road‑transport system. While the wording differed, the Court noted that the underlying intention behind the statutory language remained the same, and even if the precise expression of section 68C was not used by the framers of the scheme, it was evident that they considered those very factors. The change in the language is no doubt there but the intention underlying the words

In the judgment, the Court observed that the purpose underlying section sixty‑eight‑C of the Motor Vehicles Act was essentially the same as the purpose that the framers of the scheme had in mind, even though the exact wording of section sixty‑eight‑C was not used by them. The Court noted that the use of the expression “adequate State road transport contract carriage service” in clause three of the scheme reproduced the language found in section sixty‑eight‑C rather than the wording of section three of the Uttar Pradesh Act. This indicated that the requirements of section sixty‑eight‑C were likely to have been considered by the drafters of the scheme. The Court further recorded that the scheme was interpreted as providing for only sixteen contract carriages and that the authorities had not examined whether this number would become insufficient in the future.

The Court then turned to the distinction between “area” and “route” under the Motor Vehicles Act. It said that while some provisions of the Act clearly distinguished between an area and a route, other provisions appeared not to preserve that distinction. The Court pointed to the provisions of section fifty‑one sub‑section two clause (i), which plainly allowed the area specified at the commencement of a permit to be reduced by notifying particular routes. The Court held that there was no legal restriction preventing a later reduction of the area in accordance with the scheme of nationalisation. By withdrawing one of the routes, the effective area was reduced in the same manner as if the original permit had specified an area but limited the contract carriage to certain routes only. Moreover, the Court highlighted that section sixty‑eight‑B authorized the power to modify existing permits either by curtailing the area or by curtailing the routes. Consequently, when the State took over certain routes exclusively for its own undertakings, that portion of the area became ineffective for a private operator such as the appellant, who held a permit covering the entire area, including the routes now reserved for the State. The Court relied on the authorities in C.P.C. Motor Services, Mysore v. State of Mysore, [1962] 1 Supp. 1 S.C.R. 717; Kondala Rao v. A.P. State Road Transport Corporation, A.I.R. (1961) S.C. 82; and Dosa Satyanarayanamurty etc. v. Andhra Pradesh State Road Transport Corporation, [1961] 1 S.C.R. 642.

Regarding the procedural posture, the Court noted that the appeal fell under the civil appellate jurisdiction as Civil Appeal No. 800 of 1964. The appeal was filed by special leave against the judgment and order dated 30 March 1964 of the Allahabad High Court in Special Appeal No. 27 of 1964. Counsel for the appellant included representatives who appeared on behalf of the appellant, while counsel for the respondents and for the intervener also appeared. The judgment of the Court was delivered by Justice Hidayatullah. The Court recorded that the appellant, who was challenging the High Court’s decision, held a contract carriage permit that had been issued by the Regional Transport Authority, Agra, and that the permit remained valid until 1 February 1955. The appellant owned a single contract carriage, and his permit covered the entire Agra region, which comprised the six districts of Mathura, Agra, Aligarh, Etah, Etawah and Mainpuri. No specific route or routes were identified in his permit, and the terminal points of his operation were the boundaries of the region on all sides.

The terminal points of the appellant’s contract‑carriage operation were the outer boundaries of the Agra region on every side, and his permit was valid until 1 February 1955 covering all six districts of Mathura, Agra, Aligarh, Etah, Etawah and Mainpuri. In 1955 the Government of Uttar Pradesh, asserting authority under section 3 of the Uttar Pradesh Road Transport Services (Development) Act, 1955, prepared a scheme intended to nationalise transport services throughout the state; that scheme was subsequently set aside by an order of the Allahabad High Court on a petition filed by several private operators. In the same year the Motor Vehicles Act, 1939 was amended by the insertion of Chapter IVA, which dealt with special provisions relating to State Transport Undertakings; this amendment was effected by the Motor Vehicles (Amendment) Act, 1956 and took effect on 16 February 1957. After the amendment, the State Government revisited the scheme and, invoking Chapter IVA, issued a notification under section 68C of the Motor Vehicles Act. The revised scheme identified fifty‑six routes by name and removed those routes from the operation of contract‑carriage permits held by private operators in the Agra region, while the Government declared that it would provide adequate State Road‑Transport contract‑carriage services on those routes or on portions thereof; the operation of any non‑State transport services on the specified routes was prohibited. Private operators protested the scheme again, but their objections were overruled and the government published the scheme in the Gazette on 17 October 1959. Consequently, a writ petition, identified as Civil Miscellaneous Writ Petition No 26622 of 1959, was filed by the appellant and other respondents challenging the scheme on several grounds. On 1 February 1962 Justice Oak entertained the petition, set aside the scheme and remanded it for reconsideration in accordance with his order. The High Court did not annul the scheme in its entirety but struck it down only with respect to the petitioners, ordering that the State Government could continue to enforce the scheme in other respects; the principal ground for the partial invalidation was that the petitioners’ objections had not been taken into account and that they had not been afforded a reasonable opportunity to present supporting evidence. After the remand, the objections were examined and, on 18 October 1963, the legal authority issued an order reaffirming the scheme and overruling the objections; the sole amendment was that the term “adequate” contract‑carriage service was replaced by a provision that “sixteen contract‑carriage services or more or less in accordance with the need from time to time” would be supplied on the notified routes or portions thereof. The appellant subsequently filed a petition in the High Court contesting the scheme; Justice Broome heard the petition and dismissed it on 17 March 1964. Thereafter the appellant instituted a special appeal under the Letters Patent against Justice Broome’s decision, and the High Court, by the impugned order, dismissed the appeal summarily notwithstanding the issuance of a fairly detailed order. The present appeal was filed against that dismissal.

The appeal had been filed against a fairly detailed order that had been issued earlier. The first contention raised, in the submission of Mr. G. S. Pathak, was that although the scheme was presented as being made under section 68C of the Motor Vehicles Act, the requirements laid down in that section had not been taken into account. He argued that the scheme had actually been framed under section 3 of the Uttar Pradesh Act and that, after the series of remands by the High Court, the scheme had been approved and notified without any alteration. Consequently, it became necessary to examine the extent to which the two statutory provisions differed in their respective requirements. Section 3 of the Uttar Pradesh Act confers on the State Government the power to operate road‑transport services and reads as follows: “Power of the State Government to run Road Transport Services.—(1) Where the State Government is of the opinion that it is necessary in the interests of the general public and for subserving the common good, or for maintaining and developing an efficient road‑transport system, it may, by notification in the official Gazette, declare that the road‑transport services in general, or any particular class of such services on any route or portion thereof as may be specified, shall be run and operated exclusively by the State Government, or by the State Government in conjunction with railways, or be run and operated partly by the State Government and partly by others under and in accordance with the provisions of this Act. (2) The notification under sub‑section (1) shall be conclusive evidence of the facts stated therein.” Section 68C of the Motor Vehicles Act provides: “Preparation and publication of scheme of road‑transport service of a State transport undertaking. Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road‑transport service it is necessary in the public interest that road‑transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct.” The contention put forward was that the conditions precedent set out in the former provision were not identical to those required by section 68C. It is undeniable that while section 68C expressly refers to an “efficient, adequate, economical and properly coordinated road‑transport service” in the public interest, the Uttar Pradesh Act refers only to “the interest of the general public,” “subserving the common good,” or “maintaining and developing an efficient road‑transport system.” The

In this case the Court observed that a mere change of wording does not alter the substantive requirements imposed by the legislation. It would be mistaken to assume that, even under the Uttar Pradesh Act, the Government would disregard the need for an adequate, economical and properly coordinated road‑transport service when it decides to supply road‑transport facilities for the common good and for the purpose of maintaining and developing an efficient road‑transport system. While the language employed in the statute has indeed been altered, the Court held that the purpose underlying the words remains identical, and even if the precise terminology of section 68C was not expressly used by the drafters of the scheme, it is evident that they considered the very factors embodied in that provision. The Court further noted that the phrase “adequate State road‑transport contract carriage service” appearing in clause (3) of the scheme that was framed and notified in 1959 reproduces the language of section 68C rather than that of section 3 of the Uttar Pradesh Act. This indicates that the requirements of section 68C were likely kept in mind. The Court added that, even if only the requirements of the Uttar Pradesh Act had been contemplated, there is no difficulty in concluding that, because the two sets of requirements are essentially the same, the exercise of power must be traced to section 68C, under which it possesses validity, and not to section 3 of the Uttar Pradesh Act. Accordingly, the Court affirmed that the High Court had correctly over‑ruled the objection on this ground. The next argument presented was that the provision in clause (3) of the present scheme fixing “sixteen contract carriages or more or less” does not fulfill the spirit or the terms of section 68C. Section 68C, the argument asserted, requires the maintenance of “adequate” services, and the pre‑determination of sixteen carriages, the claim went, fails to achieve the purpose of that provision. It was further contended that because the number of carriages might be altered, the scheme could be vulnerable to challenge whenever the figure falls below the number deemed adequate. The Court pointed out that on the earlier occasion the clause referring to “adequate” carriages had been attacked as being too vague; as a result of that challenge the scheme now specifies the exact number of carriages, while also providing that the number may be increased or decreased as circumstances require. The Court interpreted the scheme as mandating the provision of sixteen contract carriages and held that it was unnecessary to speculate on whether that figure might become inadequate in the future. At the present stage the scheme simply states that sixteen carriages will be provided and does not declare that this quantity is in any respect inadequate. The final and most serious contention raised was that the scheme was improperly framed because it authorized the operation of contract carriages on particular routes while excluding the appellant, who holds a permit for an entire area irrespective of any specific route. It was argued that the drafters of the scheme had confused a stage‑carriage permit, which is granted for a specific route or routes, with a contract‑carriage permit, which is granted for an area only.

The argument advanced by the petitioner was that if State road‑transport contract carriages were to be provided, the scheme should have identified a defined area in which those carriages were to operate, and that the identified area should have been excluded from the appellant’s permit rather than fragmenting the appellant’s area by mentioning only specific routes. The petitioner submitted that such a procedure was contrary to the scheme for granting permits under Chapter IV of the Motor Vehicles Act. On behalf of the respondent it was submitted that the notification of the fifty‑six routes merely curtailed the area as it existed and that no provision of the Motor Vehicles Act had been breached. The Court observed that the Motor Vehicles Act clearly distinguishes between “area” and “route” in certain sections, although in other sections the distinction does not appear to be maintained. The terms “route” and “area” were explained in C. P. C. Motor Services, Mysore v. The State of Mysore (1) and it was pointed out that, under the scheme of the Motor Vehicles Act, 1939, these two words sometimes signify the road on which omnibuses run or portions thereof. A similar view was expressed earlier in Kondata Rao v. A. P. State Road Transport Corpn. (2). In Dosa Satyanarayanamurty etc. v. The Andhra Pradesh State Road Transport Corporation (3), Subba Rao I. observed: “Under s. 68C of the Act the scheme may be framed in respect of any area or a route or a portion of any area or a portion of a route. There is no inherent inconsistency between an ‘area’ and a ‘route’. The proposed route is also an area limited to the route proposed. The scheme may as well propose to operate a transport service in respect of a new route from point A to point B and that route would certainly be an area within the meaning of s. 68C.” The Court noted that this reasoning considerably weakens the petitioner’s contention, and further reasons indicated that the contention was misconceived. By s. 2(3) a contract carriage is defined as a motor vehicle which carries a passenger or passengers on hire or reward under a contract from one point to another without stopping to pick up or set down along the line of that route passengers not included in the contract. A stage carriage is defined as a motor vehicle adopted to carry passengers for hire or reward at separate fares paid for the whole journey or for stages of the journey. The distinction, therefore, is that a contract carriage is engaged for the entire journey between two points for the carriage of the person or persons who have hired it, and it does not have the right to pick up other passengers en route; whereas a stage carriage runs between two points irrespective of any prior contract and may pick up passengers along the way who pay fares for the distance they travel.

In this case, the Court noted that Mr Pathak argued that a close reading of sections 46 and 49 showed that an application for a stage‑carriage permit was made for a specific route or routes, whereas an application for a contract‑carriage permit was made only for an area for which the permit was required. He therefore submitted that, because contract carriages did not operate on defined routes, any scheme that curtailed a contract‑carriage permit could only refer to a part of the area covered by the permit and could not refer to a particular route or routes. He further relied on section 68G, which sets out two separate principles and methods for determining compensation for the curtailment of areas and routes, and he argued that this provision likewise indicated that a contract‑carriage permit was granted by area and not by route. Consequently, he claimed that indicating the route on which State‑run carriages would operate was ineffective for curtailing the area of a private operator, and that the scheme therefore failed.

The Court observed that section 51(2) of the Motor Vehicles Act provided that the Regional Transport Authority, when granting a contract‑carriage permit, could, subject to any rules made under the Act, attach to the permit one or more conditions, including that “the vehicle or vehicles shall be used only in a specified area or on a specified route or routes.” The Court explained that this provision clearly demonstrated that the area initially covered by a permit could be reduced by specifying particular routes, and that there was no statutory prohibition against making such a reduction later, for example, through a scheme of nationalisation. Accordingly, the Court accepted the respondents’ argument. It held that if, under section 51(2)(i), a contract‑carriage permit could be limited to particular routes despite the original petition being for an area, then a scheme that removed certain routes effectively reduced the area in the same manner as if the permit had been granted for a smaller area with those routes identified as the only ones on which the contract carriages could ply.

The Court further supported the respondents’ position with two additional points. First, it pointed out that section 68B stipulated that the provisions of Chapter IVA applied even if they were inconsistent with any provision of Chapter IV. Since sections 46 to 49 formed part of Chapter IV, there could be no inconsistency between a scheme framed under section 68C and the provisions of Chapter IV, and such inconsistency could not be a ground for attack. Second, the Court referred to section 68F, which provided that when permits were issued to a State transport undertaking for either stage carriages or contract carriages, the Regional Transport Authority retained the power to modify the terms of any existing permit by “curtailing the area or route covered by the permit in so far as such permit relates to the notified area or notified route.” This language confirmed that the authority could lawfully curtail either the area or the routes, thereby validating the scheme that took over specific routes for State undertakings and rendered those portions of the area ineffective for a private operator holding a permit for the whole area.

In this case, the Court observed that the Regional Transport Authority possessed the statutory power to alter the conditions of any permit that had already been issued. Specifically, the authority could limit either the geographical area or the particular routes that the permit covered, provided that such limitation related to a route or area that had been officially notified. The language of the provision therefore showed that the authority was authorized to either shrink the area or to curtail the routes specified in the permit. The Court noted that when the State undertakings took over certain routes on an exclusive basis, the portion of the area represented by those routes became ineffective for a private carrier such as the appellant. The appellant held a permit covering the entire area, including the now‑exclusive routes, thereby continuing to claim coverage over the whole geographic zone despite the State’s reservation of those routes. Consequently, the High Court correctly concluded that, under the notified scheme, the routes taken over should be regarded as removed from the area to which the appellant’s permit applied. The Court therefore found that the appellant’s challenge lacked any substantive legal basis and could not be sustained on the merits. Accordingly, the appeal was dismissed, the appellant was ordered to bear the costs, and the Court confirmed the dismissal of the appeal.