Madhab Chandra Das and Others vs Regional Transport Authority and Others

Ram Labhaya, J.—This order shall dispose of the three Rules Nos. 27, 38 and 39 of 1954. The questions which arise in these Rules are identical. Only one argument has been addressed by Mr. Ghose the learned Counsel for the Petitioners in all the three cases.

Petition No. 27 is from Madhab Chandra Das (Petitioner) on his behalf and also in his representative capacity as Secretary of an Association of permit-holders. The Petitioner has no right to invoke the jurisdiction of this Court under Article 226 on behalf of others. He has no such authority. His learned Counsel has not supported the petition in so far as Madhab Chandra Das seeks to represent others. The petition shall be considered as though it was on behalf of the Petitioner alone. The petition of Maulvi Matiruddin Ahmed (C.R. 38) shall similarly be treated as on his own behalf. The petitions in Rules Nos. 38 and 39 relate to another route.

These petitions are not directed against any particular order of any of the transport authorities or even of the State of Assam. They are directed against what is described as the nationalisation of certain routes. The relief sought in all cases is that the Respondent be ordered to desist from enforcing the nationalisation scheme and to renew the permits of the Petitioners.

There is no real dispute about the facts of the case. What has happened appears clearly from a combined reading of the affidavits of the parties.

Briefly stated, the facts that bear on the questions which arise in these petitions are as follows: The Petitioners were plying stage carriages on the routes in question since February 1950. They were permanent permit-holders in respect of stage carriages that they owned. It was in 1949 that the State Government decided to nationalise the transport service on certain routes. It communicated its decision to the Provincial Transport Authority, Assam, and directed it to issue permits on a temporary basis only, to permit-holders till Government could complete its own arrangements for placing their own vehicles on these routes. Since then the Regional Transport Authority was issuing temporary permits.

It is claimed in the affidavit from the opposite parties that intimation of the decision of Government was given to Petitioners, and other permit-holders. This statement of fact has not been denied by the Petitioners. Temporary permits could be issued under the law at a time for a period of four months only. These continued to be issued in succession till the beginning of 1954. The last temporary permit was for two months and was to expire on 28-2-54.

The State Government placed its vehicles on the routes in question on 1-3-1954. Before this, Madhab Chandra Das, Petitioner in Rule No. 27, who was the Secretary of the Association of permit-holders, received a communication from the Secretary, Regional Transport Authority, Gauhati on 29-12-53 to the following effect:

Nationalisation of Dhubri-Jogigopa Route has been deferred'' till 1-3-54. Temporary permits will, therefore, be issued up to 28-2-54 to all the existing permit-holders. You should, therefore, submit formal application with necessary Court-fee Stamps and pay the usual permit-fee till 28-2-54 on or before 15-1-54.

A similar notice was sent to the Petitioner in Rule No. 38. The direction was complied with by the Petitioners. Before the expiry of the last term, the Petitioner, on his own behalf, and as Secretary of the Association, sent a telegram to the Secretary, Regional Transport Authority, on 15-2-54, which runs as follows:

Regarding permit-fee instructions solicited. Urgent.

No reply to this telegram was received.

On 19-2-54, Madhab Chandra Das received the intimation from the Secretary Regional Transport Authority, Gauhati, that an emergent meeting of the Regional Transport Authority, Gauhati, was going to be held in the office of the Deputy Commissioner Gaolpara, Dhubri, on 26-2-54 between 10 A.M. to 11 A.M. to discuss about the adjustment of the displaced permit-holders owing to the nationalisation of Dhubri-Jogigopa Route with effect from 1-3-54.

On receiving this notice, it was decided by the permit-holders to represent their case to the Secretary and also to move the High Court, if necessary. In pursuance of this resolution, a representation was made to the Respondent No. 2. A copy of this representation is annexed to the petition and is marked Annexure "A". In this, Madhab Chandra Das prayed for renewal of permits and expressed the hope that the Secretary will be graciously pleased to issue necessary instructions regarding deposit of permit-fees. The validity of the nationalisation of the route was also challenged.

The Secretary, Regional Transport Authority, Gauhati, in his affidavit on behalf of the opposite parties, stated in para. No. 2 with reference to the statements made in paras. 7, 8, 9 and 11 of the petition, that as permits for the entire Transport Service of the route was given to the State Government, there was no question of issuing permits for fresh terms to the Petitioners after 28-2-1954.

The Regional Transport Authority, however, offered by way of compensation, permits for alternative routes to the Petitioners which they accepted. New feeder lines were opened for the purpose. It is also averred that the Petitioners have been plying the buses on the routes after obtaining permits for those routes. In para 4 of the affidavit, it was stated that the Transport Authorities did not nationalise the route in question. It was the State Government that decided upon nationalisation and asked the Transport Authorities to stop the issue of further permits to others except to themselves. After 29th December all these cases have proceeded on very much the same lines.

Shortly stated, the case of all the three Petitioners is that the State of Assam decided some time towards the end of 1949 to nationalise certain routes, including the route in question. It directed the State Transport Authority to see that no permanent permits were issued or granted for those routes. The explicit direction was that temporary permits should continue to be issued till such time that the Government could make arrangements for placing its own vehicles on those routes. In conformity with the directions received, the Regional Transport Authority was issuing temporary permits to the Petitioners and others for a period of foul-months at a time. When Government vehicles came, the issue of temporary permits also was stopped. All through this period, the decision of the Government to nationalise the routes was Known. It was no secret.

In petitions Nos. 38 and 39, it is stated that applications for further renewal of permits with effect from 28-2-54 were made. The relief claimed in all is that the Transport Authorities be ordered to grant further renewal.

The first question that arises is--whether the executive Government had the power to start a commercial undertaking and engage in transport even though in public interest. The question came up for consideration in -- Moti Lal and Others Vs. The Government of the State of Uttar Pradesh and Others, & the learned Judges examined it in all its bearings. Important decisions expressing different shades of opinion were all considered. The conclusion arrived at unanimously was that the executive Government have the power to engage in transport and run its own buses in competition with the citizens of the State. Mootham and Wanchoo, JJ., express-ed the opinion that

although an executive act by a State Government may not be authorised by legislative enactment, it will nevertheless be within the executive power of the State, if (i) it is not an act which has been assigned in the Constitution of India to other authorities or bodies such as the Legislature, the Judiciary or the Public Service Commission; (ii) it is not contrary to the provisions of any law; and (iii) it does not encroach upon or otherwise infringe the legal rights of any member of the public.

The statement of the law provides a good workable test.

If the executive Government, by engaging in a commercial undertaking, is not encroaching on the powers of any other body like the Legislature or the Judiciary, if its act does not offend against any provision of the law and does not infringe any rights, no one can have any grievance against that Government. The legality of its act could not be challenged, nor could any redress be obtain-ed against it.

This approach, however, is negative. Sapru J., came to'' the conclusion that

the executive power of the Indian Union and the States has to be gathered, not from our fixed notions of what the prerogative powers of the Crown are and were as applicable to India before 28-1-1950, but from the text of the Constitution itself. In determining the extent of executive power, it is permissible for Courts to take into account the nature of the relationship between the Executive and the Legislature, contemplated toy a particular Constitution.

Article 289 embodies a clear though implied recognition of the position that a State Government may enter into a trade or business of any kind including a transport business. It provides that:

Nothing in Clause (1) shall prevent the Union from imposing, or authorising the imposition of, any tax to such extent, if any, as Parliament may by law provide in respect of a trade or business of any kind carried on by, or on behalf of, the Government of a State, or any operations connected therewith, or any property used or occupied for the purposes of such trade or business, or any income accruing or arising in connection therewith.

Under this clause income frome trade or business may be taxed by the Centre by appropriate legislation.

The Constitution nowhere excludes engagement in trade or business in competition with the citizens of the State from the scope of the authority of the executive Government. Even under the Motor Vehicles Act, the State can own and use motor vehicles without permits under the Act.

Malik, C. J. observed in -- Moti Lal and Others Vs. The Government of the State of Uttar Pradesh and Others, that

in a written Constitution the executive power must be such power as is given to the Executive or is implied, ancillary or inherent. It must include all powers that may be needed to carry into effect the aims and objects of the Constitution. It must mean more than merely executing the laws.

One of the directive principles of State policy embodied in Article 38 is that

the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.

A social order for the promotion of the welfare of the people is the ideal before the State. Its achievement will necessarily involve the executive Government in. numerous commercial undertakings, which may, consistently with the welfare of the people, be not left to private enterprise.

I am in respectful agreement with the conclusion arrived at by Malik C. J. that

as incidental to the ordinary functions of Government or merely as a trade or a business venture, the state has a right to hold and manage its own property and carry on such trade or business as a citizen has the right to carry on, so long as such activity does not; encroach upon the rights of others or is not contrary to law. If in the interest of the general public and to provide them with transport amenities the State decides to run transport buses, it would only be discharging one of its primary duties. It is not necessary to have a specific Act before a State Government can provide buses for transport of passengers for hire.

It follows that though the State may engage in trade and therefore in transport business even in competition with the citizens of the State, it does not thereby acquire the power to interfere with or infringe the constitutional rights of the citizens to proactive any profession or to carry on any occupation, trade or business. It may engage in tirade without violating any law or the rights of the citizen. As a matter of fact, its position is very much the same as that of an individual of the State in this respect. In this case, the learned Counsel for the Petitioners has not disputed the powers of the State Government to engage in transport business. It is, therefore, not necessary to enter into a very minute discussion of the question.

The objection is that the Government is not merely, engaging in transport business; the State has actually created a monopoly in its own favour by executive orders, and that power it did not possess. Legislative sanction was needed if a monopoly was to be created. This takes us to the first crucial question as to whether the action of the State Government in deciding upon the nationalisation of the routes in the way that it has been done, is contrary to the provisions of any law.

The provisions regulating the plying of stage carriages or buses are contained in the Motor Vehicles Act. Section 42(1) of the Motor Vehicles Act provides that

no owner of a transport vehicle shall use or permit the use of the vehicle in any public place, save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority authorising the use of the vehicle in that place in the manner in which the vehicle is being used.

Sub-section (3) provides that Sub-section (1) shall not apply to any transport vehicle owned by or on behalf of the Central Government or the Government of a Part A State other than a vehicle used in connection with the business of a railway. While Sub-section (3) recognises the power of the Central Government and the State Government to own vehicles and, by implication, to utilise them and to run them for profit or in the interest of the public, it exempts the Governments from the obligation of obtaining a permit.

Apart from the Government, all others who own transport vehicles, can use them only in accordance with the conditions of a permit as laid down in Section 42. Provision is made for applications for permits u/s 45. Every application for a permit has to be made to the Regional Transport Authority of the region or of one of the regions in which it is proposed to use the vehicle, and if, the Applicant resides or has his principal place of business in any of those regions, to the Regional ''Transport Authority of that region.

Applications for stage carriage permits have to conform to the requirements of Section 46 which requires that they shall contain the following particulars, namely,

(i) the type and seating capacity of the vehicle in respect of which the application is made;

(ii) the route or routes on which or the area within which it is intended to use the vehicle;

(iii) the time-table, if any, of the service to be provided; and,

(iv) such other matters as may be prescribed.

Section 47 lays down the procedure of Regional, Transport Authority in considering applications for stage ''carriage permits. It lays down that the Regional Transport Authority shall, in deciding whether to grant or refuse a stage carriage permit, have regard to the following matters, namely-- the-interest of the public: generally. Then other matters are enumerated with which we are not concerned. The prominent factor for consideration is the general interest of the public. All relevant considerations which bear on the determination of the claim for a stage carriage permit are detailed in the section. There is also a provision for consideration of any representation made by a person already providing road transport facilities.

u/s 57, an application for a stage carriage permit or a public carrier''s permit has to be made no less than six weeks before the date on which it is desired that the permit shall take effect, or, if the Regional Transport Authority appoints dates for the receipt of such applications on such dates. Procedure also is prescribed for the disposal of these applications. The application''s have to be made available for inspection at the office of the Authority. Representations in writing can be made against these applications under Sub-section (4) of Section 57. If any representation is made-such as is referred to in Sub-section (3), the application has to be disposed of at a public hearing after giving the Applicant and the person making the representation an opportunity of being heard either in person or by a duly authorised representative. The Regional Transport Authority, when refusing an application for a permit of any kind, has to state its reasons for the refusal. The orders are appealable.

Section 62 provides for the issue of temporary permits. A Regional Transport Authority may, at its discretion, and without following the procedure-laid down in Section 57, grant permits, to be effective for a limited period, not in any case to exceed four months, to authorise the use of a transport vehicle temporarily,-- (a) for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings, or, (b) for the purposes of a seasonal business, or (c) to meet a particular temporary need, and may attach to any such permit any condition it thinks fit. There is no provision in this Act which authorises the State Government to appropriate a route to itself exclusively under its own authority. There is no such reservation in its'' favour.

No permit may be necessary u/s 42 for State Vehicles plying on a route. It may be open to the State to use its vehicles for transport on any particular route. But no authority is conferred on the Government to take any route and to displace all vehicles belonging to citizens who have been plying on it under permits issued to them. The decision to appropriate and take over a route to the exclusion of permit-holders, could not be arrived at under the Motor Vehicles Act or under any law for the matter of that by the Executive Government of the State, nor have the Transport Authorities any power to create or to acquiesce in the creation of any such monopoly or exclusive use of the route.

What has actually happened is, as stated by the secretary of the Regional Transport Authority in his affidavit-in-opposition, that the decision to nationalise the routes was entirely of the State Government. He disowns the responsibility of the Transport Authorities in the matter. He conceded that the decision of the Government was communicated to the Transport Authorities and, in pursuance of the directions issued by the Government, temporary permits were being issued. The grant or renewal of permanent permits was stopped and when after 4 years, Government vehicles were placed on the routes, there was no need for the issue of temporary permits. It is clear that the action of the Government in nationalising the route in this way by issuing orders to the Transport Authority, which it obeyed by surrendering its powers under the Motor Vehicles Act, was in defiance of the provisions contained in the Motor Vehicles Act. It was, therefore, obviously illegal.

The relevant provisions of the Motor Vehicles Act have been referred to above. It is undoubted that the Transport Authorities, both Regional and State, are at least quasi-judicial bodies. Applications have to be received, objections have to be entertained, and decisions have to be recorded with reasons. The decisions are appealable. These bodies are independent statutory bodies. Their obligations are to dispose of petitions or applications which are presented for permits under the Act, uninfluenced by any considerations which do not find any place in Section 57 of the Act. The only considerations which should influence the decisions of the Transport Authorities under the Act are those specifically mentioned in the relevant provisions of the Act. Any decision about the nationalisation arrived at by the State Government is not a relevant consideration.

Long before the Constitution came into force and at a time when it was being written, the Government of Madras came to a similar decision about the nationalisation of certain routes in that Province. The power of the Government was challenged by an application u/s 45 of the Specific Relief Act. According to Government Order No. 3898, dated 9-12-1946, only temporary permits could be issued in lieu of renewal of pucca permits. The permit-holders were informed that if they were agreable to treat the fees they had deposited as fees for temporary permits, necessary action would be taken. The Government intended to put its own buses on the road for hire, and as they were not ready, a temporary permit was granted to the Appellant for the period of transit till a date by which the Government expected to put its own vehicles into use.

It was held that in the circumstances of the case the grant of temporary permits was improper in the extreme; it was misusing the provisions of the Act solely for the benefit of the Government and to prevent criticism and objection by the traveling public. There was no particular temporary need within the meaning of the Act which would justify the issue of temporary permits.

When considering the questions of the statutory obligations of the Transport Authorities, the learned Judges of the Allahabad High Court in the Full Bench decision referred to above also came to the obvious conclusion that the Regional Transport Authority was a quasi-judicial body. Applications for permits must be considered by it on merits. The Authority must bring to bear independent and impartial mind and act in accordance with the provisions contained in Sections 47 and 48.

What matters are to be considered are given in the Act and Rules Reasons not valid thereunder cannot be considered. It must act primarily in the interest of travelling public. That the State Government intends to run its own buses is no ground for refusing permanent permits. Notice in advance of intention to issue only temporary permits is illegal.

Sapru J. agreed with the view of Gentle C. J. expressed in -- Sri Rama Vilas Service, Limited Vs. The Road Traffic Board, and. held further that the practice of granting temporary permits for reasons other than those specified in Section 62 was clearly irregular.

I am aware that in -- Chandi Prosad Vs. The Regional Transport Authority and Others, a Division Bench of this Court expressed the view which is in conflict with the view which prevailed in the Madras case -- Sri Rama Vilas Service, Limited Vs. The Road Traffic Board, I am inclined to the view taken in the Madras decision, but I do not consider it necessary to resolve the conflict for the purposes of this case as the nationalisation scheme cannot be saved from the taint of illegality by reason of the fact that it involves apparent contravention of other provisions of the Motor Vehicles Act, and also of Article 19(1)(g) of the Constitution. Even if temporary permits could be issued, there was no legal justification for the total exclusion of the Petitioners from the route from 1-3-1954 onwards in the way that it has been accomplished.

It is clear that in enforcing its nationalisation scheme, the Government has acted contrary to the provisions contained in Section 57 of the Motor Vehicles Act. The Government appear to have been under some misapprehension about the legal position. The Transport Authorities also shared that misapprehension. The decision was arrived at by the Government which was followed by the Transport Authorities. The Transport Authorities were obviously not bound to give effect to that decision. They should have asserted themselves and ought to have insisted on discharging their legal obligations under the Motor Vehicles Act. They committed the same mistake which the Government did.

Even the Petitioners did not object during this period of four years. Every time that a temporary permit was being issued by reason of the decision of the Government to nationalise the routes, a wrong order was being passed, and yet the Petitioners were submitting to it. It appears that applications for renewal of permanent permits or for fresh permanent permits were being put in. They have also suffered from the same misapprehension. It is clear that all through this period of four years, the legal position was not appreciated. The Petitioners, however, can urge that while they were being given temporary permits, they suffered no loss; their vehicles were on the routes, the Government buses did not come in and there was no need for them to move in the matter. All the same, it cannot be denied that they had the right to apply for obtaining renewal of their permanent permits or fresh permanent permits. They did not avail of their legal right and meekly submitted to repeated contraventions of their legal rights though their contravention caused no loss.

The executive Government in engaging in, transport business, has to avoid encroaching upon or otherwise infringing the legal rights of any member of the public; where these rights are infringed, the activity would be illegal. Article 19(1), Clause (g) guarantees to the citizens the right to practise any profession or to carry on any occupation, trade or business. It is further provided (vide Clause (6)) that nothing in Sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes or prevents the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to or prevents the State from making any law relating to (1) the professional or technical qualifications necessary for taking any profession or carrying on any occupation, trade or business or (2) the carrying on by the State or by a corporation owned or controlled by the State, of any trade, business, industry or ser-vice, whether to the exclusion, complete or partial, of citizens or otherwise.

It is clear that under Clause (6) as amended, any trade, business or industry which excludes, completely or partially, the citizens of the State, can be started, though only by legislative sanction. Clause (g) of Article 19(1) does not stand in the way of the State making any laws relating to the carrying on by the State or by a corporation owned or controlled by the State, of any trade or business even to the exclusion, complete or partial of the citizen. The executive Government has no power to carry on any trade, business or industry to the exclusion, complete or partial, of the citizen. It can do so only under a law which satisfies the requirements of Clause (6). If it creates a monopoly or excludes citizens from a profession or trade with-out the authority of the law and in the exercise of its ordinary functions, it infringes the constitutional right of the citizen guaranteed to him by Article 19(1)(g).

The contention of the Petitioners, therefore, that the fundamental right guaranteed to them is infringed by nationalisation (which is another name for State monopoly) without any legislation offends against the provisions contained in Article 19, is correct. There is no answer to this contention. It is not claimed on behalf of the Government that it can create a monopoly in transport business or any business for the matter of that, without any legislation where the rights of the individual citizens which are guaranteed to them under Article 19(1)(g) are violated as a result of the action taken. Nationalisation in the way that it has been carried out in this case, is thus hit by the provisions contained in the Constitution. It infringes a right guaranteed to the citizen by the Constitution; the right that the Petitioners had to carry on their profession or trade or ply their buses on the routes in question.

The learned Chief Justice of the Allahabad High Court was also of the view that the nationalisation of any industry, transport including, did not appear to be possible without legislation since it would be an infringement of the right of the citizen and, therefore, nationalisation could be only by legislation. Clause (6) has since been amended and the Legislature has been given wide powers to make laws allowing the State or any corporation owned or controlled by the State, to carry on any trade, business, industry or service to the exclusion, total or partial, of the citizens. Appropriate legislation may authorise the Government to embark on any commercial or industrial undertaking under Clause (6) of Article 19. In that case, partial or entire exclusion of the citizens from trade or profession would be justified.

The Petitioners have succeeded in showing that the Regional Transport Authority had acquainted them with its intention to issue temporary permits only, in view of the directions received from the Government. It was therefore receiving applications for the grant of temporary permits only. They have also succeeded in showing that the nationalisation accomplished by the Government by its order imposed on the Transport Authority was illegal, being contrary to the provisions contained in the Motor Vehicles Act and also by reason of the fact that it is hit by the guarantee given to the citizens under Article 19(1)(g).

The question now arises what relief, if any, can be granted to the Petitioners. Applications, as required by Section 46 of the M.V. Act, have not been put in by the Petitioners. They were having temporary permits according to the directions which the Transport Authorities had received from the Government. The last representation contained in Annexure "A" to the petition in Rule 27 was merely a request for renewal of the temporary permits which expired on 28-2-54. It was also a request on behalf of the entire Association of the permit-holders. It cannot be construed as an individual application for the grant of a fresh permit or even for the renewal of the permanent permit that had expired some 4 years before. For a period of four years, only temporary permits were being issued. In the two other petitions (Rules 38 and 39) there are similar allegations of applications for further renewal of permits which expired on 28-2-54. No further renewal of these temporary permits could be granted.

In all these cases, there were no applications as contemplated by Section 46. The whole case was argued on the basis that there were no applications for renewal of permanent permits which had expired long before 28-2-54, or for grant of fresh permanent permits. In the absence of applications u/s 46, the question arises whether any writ in the nature of mandamus could be issued. The Transport Authorities cannot be said to have failed in the performance of any public duty in the absence of any application made for a fresh permit or for renewal of a permanent permit. It is true that the Petitioners have been misled, just as the Transport Authorities were themselves misled. But even that would not justify the grant of a writ of mandamus when the Authority concerned cannot be called upon to perform a legal duty or obligation. The obligation arises u/s 47 only when there is an application u/s 46. The past cannot be recalled. It cannot even be cured by a writ in the nature of Mandamus. In regard to the future, the Petitioner may be entitled to relief only if the Transport Authorities fail in discharging their legal or statutory obligations in spite of applications made to them.

The learned Advocate-General has pointed out that the Petitioners agreed to accept permits for alternative routes by way of compensation and they are plying their vehicles on those routes. This circumstance has no bearing on the questions of the validity of the impugned nationalisation of the routes, though it may have some bearing on the question whether relief under Article 226 may be granted or not. Even that question does not arise as no applications u/s 46 were put in. If applications are put in the Transport Authorities shall have to consider and dispose them of in accordance with law.

As stated above, the whole difficulty has arisen from a misapprehension of the legal position. If applications are put in by the Petitioners now, we have no doubt that, in view of the elucidation of the legal position, these applications whether for renewal of permanent permits or for fresh permits will be entertained and duly considered and disposed of. But as things are, no writ, order or direction can be issued to the Regional Transport Authorities, for there is no basis for any action by them under the provisions of the Motor Vehicles Act. No relief, therefore, can be granted to the Petitioner in the circumstances of the case. The petitions, therefore, must fail and are dismissed. All the three Rules are discharged. We make no order as to costs.

Deka, J.

I agree with the proposed order. (Leave to appeal to the Supreme Court was granted on oral application.)