JUDGMENT
V. Sivaraman Nair, J.
1. Petitioners are operators of Contract Carriages in different districts of the State. The State Government published a draft scheme for nationalisation of contract carriages covering the entire State of Andhra Pradesh. The proposal is to exclude all private operators. Petitioners submit that the draft scheme which was published in the Government Gazette dated 19-8-1989 is illegal and unconstitutional. The reason for so contending is that Sections 99 and 100 of the Motor Vehicles Act, 1988 (for short the 1988 Act) which apply to the publication of draft scheme and its approval in so far as they have conferred powers on the State Government to hear objections to the draft scheme proposed by it and to approve it are void and inoperative as also violative of the principles of natural justice. In the alternative they seek a declaration that Chapter -VI of the 1988 Act has no application to contract carriages.
2. Counsel appearing for the petitioners submit that under Sections 99 and 100 of the 1988 Act the State Government is constituted as the proposer and adjudicator of schemes for nationalisation. They submit that the State Government has to function as judge in its own cause. This is said to be a departure from Section 68-C of the Motor Vehicles Act, 1939 (for short the 1939 Act) which provided that the State Transport Undertaking shall propose the draft scheme and the Government shall approve or modify or reject the scheme on a consideration of objections. The next submission is that approval of the scheme under Section 100 involves quasi-judicial process; and it is elementary that the approving authority shall comply with the principles of natural justice. Bias being one of the elements to be eliminated in such a process, the provisions of Sections 99 and 100 which constitute the same authority as the party and judge are invalid. Counsel submit that fairness in adjudications – may be judicial, quasi-judicial or administrative – is a manifestation of Article 14 of the Constitution of India; and since no law can contravene Article 14, Sections 99 and 100 which provide for violation of fairness in procedure are unconstitutional. Another argument is that assuming that the above provisions are valid, they shall be so read as to enable different departments to be the proposer and adjudicator. It is submitted that this process has got the advantage of avoiding the statute being invalidated on the ground of bias. Yet another submission is that Chapter-IV of the 1988 Act has no application to Contract Carriage which are differently defined and dealt with under the Act. As a part of the submission regarding bias, it is stated that Minister for Transport who heard the objections had foreclosed his mind by declaring that it will be impossible to accommodate private operators in nationalised sectors.
3. Sri G. Suryanarayana, who led the arguments, took us to the corresponding provisions in Chapter IV- A of 1939 Act and Chapter VI of the 1988 Act. He referred us to the definition of Contract Carriage (Section 2 (7)), Public Service Vehicle (2 (35)1 Stage Carriage (2 (40)), transport vehicle (2 (47)) and road transport service (Se£tion 97). He also invited our attention to the fact that the 1988 Act was brought into force with effect from 1 -7-1989, but the rules were promulgated only by G.O.Ms.No. 216 Transport (R & B (T. R. II) Department, dated 7-8-1989, were published in the gazette on 25-8-1989 and were to commence on 1-9-1989. Reference was made to Rule 298 of the above rules and Form STU in which the impugned scheme was published in G.O.Rt.No. 861 dated 19-8-1989. Counsel submits that form STU was prescribed under Rule 298 of the rules which came into force only on 1-9-89, but the scheme was published earlier on 19-8-1989. Recitals contained in the scheme are said to indicate that the State Government has already formed an opinion that due to the fourfold requirements mentioned in Section 99 of the Act, that it is necessary in public interest to exclude private contract carriage operators and has thus prejudged the issue, disabling it to bring an unbiased and independent mind to the objections which the petitioners have filed. Absence of particulars in the scheme disabling the operators from raising effective objections thereto was also urged as a circumstance invalidating the proposal. These submissions are generally supported by other counsel.
4. Mr. Ramachandra Reddy emphasised that the need for fairness in action has been recognised as a constitutional requirement in the decision of the Supreme Court in Royappa v. State of Tamilnadu, which has been reiterated in the recent decision in Neelima Misra v. Harinder Kaur Paintal, .
5. Sri E. Manohar appearing for some of the petitioners submitted that absence of bias being a basic and fundamental requirement of fair procedure, it is necessary that the person who proposes and the person who adjudicates are different. He submits that this bifurcation of authorities for initiation and adjudication of the schemes of nationalisation has been adopted in many States by making specific provisions in the Rules of Business. He referred particularly to the decision in T.G. Mudaliar v. State of Tamilnadu, dealing with Rule 23-A of Madras Rules of business which provided that the scheme was to be proposed by the Industries Department and objections were to be heard by the Home Department. He emphasised the need for such bifurcation of functions. In view of the provision in Section 99 of the 1988 Act as distinct from those in Section 68-C of the 1939 Act, it is said the State Government should not have been the proposer as well as adjudicator of objections to the scheme.
6. Sri E.P. Sikhamani submitted that the above scheme under Section 99 will be unworkable if the State Government is ultimately to approve the same. Different districts in the State have widely different requirements of contract carriages and those requirements are not duly reflected in the scheme. Counsel also submitted that though there is a recital of the fourfold formula in the draft notification, it is hardly possible to assume that the State Government has actually satisfied itself of the need for efficiency, adequacy, economy and proper coordination of transport services as justifying promulgation of the draft scheme.
7. Government Pleader Sri Eswarayya submitted that both under Section 68-C of the 1939 Act and Sections 99 and 100 of the 1988 Act, it is virtually the same authority which proposes and finally approves the scheme of nationalisation. He referred us to a number of decisions on the question of official bias in the context of the provisions of the 1939 Act and submitted that the same principle applies to the present situation as well. It is his submission that the petitioners have no case that the same person who initiated the scheme heard objections, and therefore the principle of bias cannot apply. He invited our attention to the decision of a Full Bench of this court in Secretary, RTA, Guntur v. E. Rama Rao, 1990 (3) ALT 272 to state that the permit holders have no legal right and cannot object to the scheme of nationalisation. He submitted that since the government is yet to take a final decision on the proposal for nationalisation, writ petitions cannot ordinarily lie. He also referred us to the decision of our learned brother M.N. Rao, J. in P. Narsimloo v. Government of A.P., 1990 (3) ALT 502 wherein this court repelled the challenge against the constitutionality of Chapter-VI of the 1988 Act with specific reference to Sections 99 and 100. He also invited our attention to the fact that a Division Bench of this court has subsequently affirmed that decision in Government of A.P. represented by Secretary, Transport v. P. Narsimloo and Ors., 1991 (1) ALT 370. Government pleader submitted that the satisfaction of the Government that it is necessary in public interest that road transport services shall be nationalised to provide efficient, economic, adequate and properly coordinated service is tentative and is subject to finalisation only after considering objections of operators or others on any or all those aspects. He therefore urged that deficiencies in the proposed scheme are matters which State Government can rectify at the stage of approving the scheme.
8. Sri Vijaya Kumar, Additional Standing counsel for the Central Government submitted that the distinction between quasi-judicial and administrative proceedings is too narrow. He submits that the objection to a scheme of nationalisation cannot create a Us in the technical sense; and therefore a duty to act judicially or quasi judicially cannot be easily inferred. He submits further that in view of the large number of decided cases, the impugned provisions cannot be struck down for the only reason that there is a possibility of official bias in the determinative process.
9. We have to consider these rival contentions in some detail.
10. The definitions contained in the Act have not been substantially altered nor are the provisions relating to procedure for proposing and approving the scheme of nationalisation substantially varied except that instead of State Transport Undertaking proposing and publishing the scheme under Section 68-C of the 1939 Act, it is now for the State Government to propose the scheme. In both cases, the scheme has to be approved by the State Government It is because of this change that the petitioners raise the present challenge against the validity of Sections 99 and 100 of the 1988 Act.
11. The same question was the subject matter of a decision in P. Narsimloo v. Government of A.P. ( 5 supra ) which was affirmed in Government of A.P. v. Narasimloo (6 supra). This court upheld the validity of Sections 99 and 100 and held that those provisions could not be held to violate the principles of natural justice. Reliance was placed in those decisions on Nageshwar Rao v. APSRTC, and Kondala Rao v. APSRTC, .
12. The submission of Mr. Suryanarayana that contract carriages cannot be nationalised under Chapter-VI of 1988 Act because of the essential difference between contract carriages as defined in Section 2 (7) and stage carriages ( Section 2 (40), cannot be accepted, since both are comprehended by “Road Transport Service” as defined in Section 97 of the Act. “Service of motor vehicles carrying passengers or goods or both by road for hire or reward” fall within the above definition. Carriage of passengers by road for hire or reward is the common characteristic of contract carriages and stage carriages.
13. In Saghir Ahmad v. State of U.P., , Mukherjea, J. observed –
“Under the Indian Constitution the contract carriers as well as the common carriers would occupy the same position so far as the guaranteed right under Article 19 (1) (g) is concerned and both are liable to be controlled by appropriate regulations under Clause (6) of that article”.
It is therefore clear that the distinction between contract carriers and common carriers (Stage carriage) is not relevant to test test validity of State monopoly. The Supreme Court upheld the validity of U.P. Road Transport Act (Act II of 1951) which created an exclusive monopoly in the State in providing passenger transport services by road.
14. Counsel submitted that the scheme of nationalisationof contract carriage service is not within the comprehension of either of Chapter IV-A of 1939 Act or Chapter-VI of the 1988 Act. That submission overlooks the decision of the Supreme Court in Roshanlal Gautham v. State of U.P., . The court had to deal with a scheme of nationalisation of contract carriage service promulgated by the U.P. State Government. The court upheld the scheme after considering the difference in definition between’ ‘contract carriage’ and ‘ Stage Carriage’. The same definitions as in Sections 2 (3) and 2 (29) of the 1939 Act are bodily incorporated in Sections 2 (7) and 2 (40) of the 1988 Act. We are therefore not inclined to agree that the power in Chapter -VI of the Act to frame and implement schemes is confined only to exclude stage carriage operators. It is evident from Section 97 that Chapter VI deals with ‘Road Transport Service’ which include motor vehicles carrying passengers or goods or both by road for hire or reward. Explanation to Section 2 (42) is also to the same effect. ‘Contract Carriages’ are Motor Vehicles carrying passengers by road for hire or reward, as is clear from Section 2 (7) of the Act. We do not see any force in this submission.
15. The validity of Chapter IV -A of the 1939 Act containing almost similar provisions except for the change in the authority originating the scheme was considered in the context of Articles 19 and 14 of the Constitution of India on a number of occasions. In G. Nageswara Rao v. APSRTC ( 7 supra) the court repelled the contention of the petitioner that nationalisation of stage carriage service was invalid, since it deprived them of their substantial rights and ” left them only the husk”. The court stated in para 9 at page 317 that –
“Though the cancellation of the permit has the effect of crippling his business, none of the assets of the business is taken over by the State Transport Undertaking; he is left in the possessions of the entire assets of the business. It is no doubt true that in the context of the scheme a nationalisation he may not be able to make use of his assets in other routes or dispose of them at a great advantage to himself; but it cannot be said that by cancelling the permit, what is left with him is only the ‘husk’. In fact the entire assets of the business are left with him and the State Transport undertaking has not taken over the same”.
This passage should serve as an effective answer to the petitioners who assail Sections 99 and 100 of the Act and the draft scheme for complete exclusion of private contract carriage operators as exproprietary.
16. The Supreme Court considered the same question in H.C. Narayanappa v. State of Mysore, . In Kondala Rao v. APSRTC ( 8 supra) the challenge against Chapter-IV -A of 1939 Act was considered once again with reference to Articles 19 and 14 of the Constitution. The court upheld the validity on both counts.
17. It is true that Section 99 of the 1988 Act provides that the draft scheme shall be prepared by the State Government itself, whereas Section 68-C of the 1939 Act required the State Transport Undertaking to prepare and publish the draft scheme. Counsel submits that this change is very material, since its effect is to constitute the same authority as the proposer and adjudicator and enables the government to judge its own cause. Counsel submit that this marks out a departure which renders earlier decision in this regard inapplicable. They also submit that the pervasive presence of Article 14 of the Constitution as an anti-thesis to arbitrariness had not fallen for consideration in earlier decisions. According to counsel, this makes all the difference.
18. To appreciate this submission fully, it is necessary to have a look at the state of the law and facts which fell for consideration in some of the decisions of the Supreme Court under Chapter IV-A of the 1939 Act which correspond materially to Chapter-IV of the 1988 Act.
19. Section 68-A of the 1939 Act defined a State Transport undertaking as meaning-
(i) undertaking of Central or State Government providing road transport service.
(ii) Any road transport corporation formed under Act 64 of 1950, and
(iii) any municipality, or corporation or company owned or controlled by the Central Government or one or more State Governments or by the Central Government and one or more State Governments.
Clause (a) of Section 68-A of the 1939 Act dealt with ‘Road Transport Service’ whereas the explanation to Section 2 (42) and Section 97 of the 1988 Act deal with the same term now. The State Transport undertaking in many States which were involved in some of the decisions of the Supreme Court were the Transport Departments of the State Government Apparently it took some time to form corporations under the S.R.T. Corporations Act 64 of 1950.
20. In Andhra Pradesh, the Corporation was formed only with effect from 11-1-1958 by a notification of that date. The draft scheme which fell for consideration of the Supreme Court in G. Nageswara Rao (7 supra) was published by the General Manager of Andhra Pradesh Road Transport in notification gazetted on 14-11-1957. The Secretary, Home Department in charge of Transport heard the objections on 26-12-1957 and published the scheme as approved by the Chief Minister in gazette dated 7-1-1958. Transport Department of the State Government was the State Transport Undertaking at that time. The court held on the basis of the principle that the person or persons who were entrusted with the duty of hearing a case judicially should be those who have no personal bias in the matter.
“The hearing given by the Secretary-Transport Department certainly offends the said principle of natural justice and the proceeding and the hearing given in violation of principles of natural justice are void.”
21. The Supreme Court held that the final approval of the scheme by the Chief Minister on the objections which were heard only by the Transport Secretary was unsustainable; but the court held that Chief Minister himself could have heard the objections and approved the scheme, even though its draft was prepared and published by the Transport Department.
22. Pursuant to that decision, the Government issued fresh notices to the objectors that the Chief Minister would hear them on 9-12-1958. They were informed that further objections could be filed before 30-11 -1958. The Chief Minister heard the objectors and passed orders on 19th December, 1958 rejecting all objections. The approved scheme was thereafter published in the gazette dated 22-12-1958. That approved scheme and the consequential orders were the subject matter of the decision in G. Nageswara Rao v. State of A.P., . The Court held that –
“The entire scheme of the Act visualises in case of conflict between the Undertaking and the operators of private buses, that the State Government should sit in judgment and resolve the conflict. The Act therefore, does not authorise the State Government to act in derogation of the principles of natural justice”,.
Dealing with the question of violation of principles of natural justice – the Chief Minister having heard and rejected the objections to a proposal initiated by the transport department, the court held-
“There is an essential distinction between the functions of a Secretary and a Minister; the former is a part of the department and the latter is only primary responsible for the disposal of the business pertaining to that department” and that
“We cannot therefore accept the argument of the learned counsel that the Chief Minister is part of the department constituted as a statutory’ under taking under the Act.”
23. In H.C. Narayanappa and Ors. v. State of Mysore (11 supra) the relevant facts were that the General Manager, Road Transport Department of Mysore State had published a draft scheme under Section 68-C of the Motor Vehicles Act on January 13, 1959 . The Chief Minister heard the objections and rejected the same. The approved scheme was published in the gazette on April, 28, 1959. The said scheme and the consequential orders were challenged before the Supreme Court. It is clear that the State Transport undertaking in that case was a department of the State Government. Dealing with the objection that the Chief Minister who approved the scheme under Section 68-D was biased, the Supreme Court held, on a reference to G. Nageswara Rao v. APSRTC (12 supra) that-
“The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity, and unless there is reliable evidence to show that he is biased, his decision will not be liable to be called in question, merely because he is a limb of the Government.”
24. In Kondala Rao v. APSRTC (8 Supra) the court reiterated that chapter IV-A of the Motor Vehicles Act did not violate either Article 19 or 14 of the Constitution of India The objection on the ground of bias was based on the following facts:
The Chief Secretary to the State Government was the Chairman of the Road Transport Corporation who proposed the scheme and was therefore alleged to be highly interested in its final approval and implementation. In other words, the scheme was really a proposal of the State Government; and thus the State Government was made a Judge in its own cause and therefore its decision was vitiated by official bias. Reference was also made to the decision of a sub-committee consisting of Ministers, Secretary and Officers of connected departments and presided over by the Minister in-charge of Transport on January 28, 1960 to the effect that the scheme of Nationalisation of bus services would be implemented in West Godavari and Guntur Districts before the end of the year. It was therefore contended that the Minister for transport had predetermined the issue. After referring to the decision in G. Mageswara Rao v. State of A.P. (12) supra, the court held-
“Though under the provisions of the Act, the State Government has some control, it cannot be said either legally or factually that the said Corporation is a department of the State Government. The State Government, therefore, in deciding the dispute between the said undertaking and the operators of private buses is only discharging its statutory functions. This objection therefore, has no merits. Nor can we say that it has been established that the Minister in-charge of the portfolio of transport has been actuated by personal bias. The fact that he presided over the sub-committee constituted to implement the scheme of nationalisation of bus services in the West Godavari District does not in itself establish any such bias. Indeed, in the counter affidavit filed on behalf of the first respondent the contents and authenticity of the reports of the proceedings of the sub-committee published in the Telugu daily’ Andhra Patrica’ were not admitted. Even if the sub-committee came to such a decision, it is not possible to hold that it was a final and irrevocable decision in derogation of the provisions of the Act. It was only a policy decision and in the circumstances would only mean that the subcommittee advised the State Government to implement the policy of nationalisation of bus services in that particular district. The said decision could not either expressly or by necessary implication involve a predetermination of the issue.”
25. In Kalyan Singh v. State of U.P.”, the challenge was against the implementation of the scheme of nationalisation. The State Government published a notification on May 20, 1960 promulgating a draft scheme under Section 68-C and inviting objections, Kalyan Singh filed his objections in June, 22nd, 1960. Objections were heared by the Joint Secretary, Judicial Department, who approved the scheme with some modifications. The Government published the approved scheme in the gazette on October, 8, 1960. The scheme was to be operative from 15th October, 1960. The challenge was against the implementation of the scheme under Section 68-F of the Act. Dealing with the objection that the State Government constituted itself as a Judge in its own cause, the court observed that this anomaly could be avoided if the State Government created a department to be in charge of the undertaking and heard the objections and approved or modified the scheme in a manner without violating the principles of natural justice. The court however held:
“A state transport undertaking means, inter alia an undertaking run by a State. The statutory authority created is an undertaking run by a State. The state can only run an undertaking through its officers; it may entrust the conduct of the transport service to a particular officer or to a department of the State; in either event, it is the Slate Government that runs the undertaking. The statutory authority, namely, the State Transport undertaking, has to form an opinion within the meaning of Section 68-C of the Act and the opinion must necessarily be that of the State Government which runs it. If the State Government running an undertaking forms an opinion, it can legitimately be said that the statutory authority i.e., the State Transport Undertaking, has formed the opinion.”
It is important to note that the argument of bias was repelled after finding that the initial opinion for promulgation of the scheme, which the State Government approved was of the State Government itself.
26. It is clear from the above decisions that no violation of Principles of natural justice is involved if the department proposes the draft scheme and the Minister in charge of the department hears and disposes of the objections. No distinction was made between cases where the Road Transport Department itself functioned as the State Transport Undertaking and proposed the scheme and the Minister in charge of that department approved the same after rejecting objections. The fact that the Minister himself was a member of the sub-committee which decided to implement the policy of nationalisation Kondala Rao v. APSRTC (8 supra) or the Secretary, Home Department in-charge of Transport Department was a member of the committee which prepared the draft scheme and finally heard and approved the scheme (Nageswara Rao v. APSRTC (7 supra)) or that the Minister for Transport who heard objections to the draft scheme had asserted earlier in the legislative assembly that the Government would take over all the routes eliminating all private operators before a specified date Biraj Mohan v. State of Orissa, or that the Chief Secretary to the Government was himself the Chairman of the State Transport undertaking (Kalyansingh v. State of U.P. (13 supra)) were not considered sufficient to invalidate the approval as being vitiated by bias and to have violated the principles of natural justice. The same principles were extended to test the validity of Sections 99 and 100 of the 1988 Act in Narsimloo’s case (5 supra) and that was approved in Govt. of A.P. v. Narsimloo (6 supra)) in appeal.
27. T. G. Mudaliar v. State of Tamil Nadu (3 supra) dealt with a case where a draft scheme was prepared by the Sub-Committee consisting of Secretary, Home Department who himself heard the objections and rejected the same. The court held that participation of the Secretary, Home Department who was a member of the committee to prepare the draft scheme for nationalisation of road transport and who published it in his capacity as Secretary for Industries did not invalidate the approval of the scheme on the ground of bias. This decision was based on Kondala Rao v. APSRTC (8 supra)) which held that-
“even if the sub-committee came to a decision that under the scheme the State Government would takeover the bus services in the area concerned, the decision cannot be said to be a final and irrevocable decision in derogation of the provisions of the Act. It was only a policy decision and in the circumstances could only mean that the sub-committee advised the State Government to implement the policy of nationalisation of bus services in that particular district The said decision could not either expressly or by necessary implication involve a predetermination of the issue; it can only mean that the policy would be implemented subject to the provisions of the Act.”
28. We are of the opinion that it is open to the Legislature to entrust the formulation, finalisation and implementation of the policy of the statute to the executive Government. Combination of all these processes in the government may perhaps be more expedient for effective governance. The requirement of fairness in action which is a part of the guarantee which Article 14 envisages may have to be satisfied substantially unless the statute excludes the same in specific exigencies. But it cannot be insisted that fairnessed shall be measured by only one invariable standard irrespective of situational differences and specific context which a statute has to handle. That will be to ritualise fairness and render natural justice unnatural. The statutory mandate in chapter VI of the 1988 Act in respect of fairness extends to the proposal of the scheme by the department and hearing of objections etc., by the Minister who cannot be considered as part of the department. The decided cases which we have referred to above indicate that official bias in the matter of formulation and implementation of policy of nationalisation does not disqualify the minister to hear objections. We, therefore hold that Sections 99 and 100 of the Act cannot be held to violate principles of natural justice, in that it is likely to constitute the State Government as Judge in its own cause. We should remind ourselves that there is always a presumption of constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles.
30. We find from the facts of this case that one Minister for transport was perhaps associated with the formulation of the draft scheme which was published on 19.8.1989 by the Secretary to the Transport Department, and the Minister of Transport in the successor government heard the matter. These facts cannot spell out any personal bias on the part of the latter minister who heard the matter.
31. There is a woeful dearth of materials regarding the personal bias alleged against the Minister of Transport who heard the objections. The averments are to the effect that in a speech at Rajahmundry on 20.2.1990 he had ruled out continuance of private operators after implementation of the scheme of nationalisation. The same avernments were urged in Narsimloo’s case (5 supra) to assail a scheme of nationalisation of passenger transport services.
32. It was asserted in that case that the Minister of Transport who was to hear objections under Section 100 of the Act to a draft scheme for nationalisation of stage carriage services had addressed a press conference in the Secretariat on 25.1.1990 and indicated that the scheme of nationalisation would be implemented. Reference was also made to a speech made by the Minister on 20.2.1990 at Visakhapatnam as was reported in News Papers like Udayam, Deccan Chronicle and Eenadu to the effect that there was no scope for private operators after implementation of the scheme of nationalisation. After calling for and examining the authentic texts of the regional news broad-cast of the All India Radio on 25.1.1990 and 19.2.1990 and the Telugu news telecast over the Doordarshan on 25.1.90 and 18.2.1990, M.N.Rao, J. held that –
“None of these official versions contain the statement attributed to the Minister.” It was therefore held that the petitioners did not prove their contention that the Minister had personal bias in overruling the objections. We have to deal with the same objection with reference to the same statements attributed to the Minister for Transport.
33. Dealing with almost the same contention based on bias,& ” namely that the Chief Secretary to the A.P.Government by his statement to the press on 26.12.1957 had foreclosed the mind of the Government against an independent and unbiased consideration of the objections, the Supreme Court in Nageswara Rao’s case (7 supra) held that-
“We cannot from this publication in the newspapers come to the conclusion that the Government having finally decided to reject all possible objections, went through a farce of an inquiry.”
34. Dealing with a similar objection in Nageswara Rao’s case (12 supra) that the Chief Minister in his speech on 14.10.1957 had foreclosed his mind against the consideration of objections, the Supreme Court held that-
“If these newspaper cuttings are excluded from evidence, the factual basis for the appellants argument disappears. We, therefore, hold that the Chief Minister was not disqualified to hear the objections against the scheme, of nationalisation”.
35. The effect of the decisions referred to earlier seems to us to be that official bias does not invalidate the proceedings if the relevant statute ordains the same authority to adjudicate on a dispute regarding implementation of the policy of the State. The only circumstance in which a different inference will be permissible is where personal bias by reason of pre-determination can either expressly or by necessary implication be made out. We have to examine the present case in the light of the above principle.
36. It is evident from the pleadings that the Transport Department of the State had assented to the draft scheme. It is the submission of the petitioners that the then Minister of Transport had assented to the draft proposal. Objections were heard from 6th to 10th of August, 1990 by the then Transport Minister. There was a change in personnel of Transport Minister in the meantime. It is therefore obvious that no personal bias can be attributed to the Minister who heard the objections from 6th to 10th of August, 1990. If the department proposed the scheme and the Minister heard the objections, there can be no violation of principles of natural justice, since there is an essential distinction between the functions of the Secretary and the Minister, as was found in G .Nageswara Rao case (12 supra) (para 8 of page 1380). To the same effect are the other decisions which we have referred to.
37. It is clear from the provisions of the 1988 Act that the scheme of the legislation is to entrust the formulation, finalisation and implementation of the policy of nationalisation to the State Government. The only difference in the 1939 Act was that the formulation of policy was entrusted to the State Transport undertaking which was but an agency or limb of the Government. For the reasons stated above, we do not find any reason to hold that this change has affected the validity of Sections 99 and 100 of the 1988 Act.
38. It is true that in India we have to look ahead of the legislation and see whether that offends the provisions of the Constitution, since unlike in Great Britain where Parliament is supreme, in India the Parliament is subordinate to the Constitution. The decisions which we have referred to particularly Nageswara Rao v. APSRTC (7 supra) H.C. Narayanappa v. State of Mysore (11 supra), Kondala Rao v. APSRTC (8 supra), Kalyan Singh v. State of U.P.(13 supra) have upheld the validity of Section 68-C and D in Chapter IV-A of the 1939 Act on the touch-stone of Article 19 of the Constitution of India. The test of arbitrariness which is relevant under Article 14 also formed part of the challenge to the validity of the above provisions. The Supreme Court upheld the statute as valid under Article 14 as well. The only difference now relevant is the advances made by pronouncements of the Supreme Court in relation to fairness in action as a part of absence of arbitrariness which is the key note of Article 14 of the Constitution of India and the change of the initiator of the formulation of policy as the State Government instead of the State Transport undertaking.
39. We do not find any reason to hold differently from the decided cases due to the new trend in the pronouncements of the Supreme Court, with regard to the amplitude of Article 14 of the Constitution of India. Fairness in administrative action as much as in judicial and quasi-judicial proceedings is the emphasis of this new trend of decisions. We are of the opinion that official bias in entrusting the formulation, finalisation and implementation of a legislative policy will not invalidate the statute, or the resultant orders, unless the petitioners succeed in establishing that the determination by the person who heard and finalised the scheme was vitiated by personal bias. Many Indian statutes entrust the three-fold functions in relation to policy of legislation to almost the same agency but with an obligation to hear the opponents before such policy is finalised and implemented. Professor H.W.R.Wade has stated in his ‘Administrative Law'(5th Edition) that “attempts to represent departmental Policy as objectionable on grounds of natural justice have rarely been made and have uniformaly failed”. We do not find any reason to differ. We are therefore, not in a position to hold that the mere fact that the State Government is entrusted with the formulation as also finalisation and execution of the policy violates the principles of natural justice or the requirement of fairness in governmental action.
40. The submission made by Mr. E. Manohar that it is desirable to provide bifurcation of functions of initiation of the scheme and its approval has some support from the decision of the Supreme Court in Kalyan Singh v. State of UP (13 supra) In paragraph 8 of the Judgment of the Supreme Court it was stated-
” It is true that the provisions maintain a distinction between a State transport undertaking and the State Government. It is also true that the State Government has to hear the objections of the aggrieved parties and also the representatives of the State transport undertaking before approving or modifying the scheme, indicating thereby that the State Government has to decide the dispute that may arise between the two contenstants. Though the functions of the different bodies are clearly demarcated in the case of undertakings run by corporations, there is overlapping in the case of an undertaking run by a State Government. This may lead to an anomalous position, but in practice it can be avoided, if the State Government creates a department to be incharge of the undertaking and hears the objections and approves or modifies the scheme in a manner without voilating the principles of natural justice.”
41. In the light of the various decisions of the Supreme Court which we have referred to, we cannot hold that Section 100 is invalid due to the anomalous position pointed out in the above decision. We however feel that it is desirable that in view of the change brought about in Section 99 of the 1988 Act substituting the State Government as the initiator of the scheme that some amount of dichotomy of authority is devised by the State by framing or amending the relevant rules.
42. Counsel for the petitioners submitted that in formulating the draft scheme, the State Government does not appear to have adverted to the relevant factual details relating to each of the districts; the number of contract carriage permits issued by the respective transport authorities and the need for substitution of such services. Sri Suryanarayana submitted that the scheme is bereft of details and that is a defect which vitiates the whole proposal. After some discussion at the Bar, we are of the opinion that it is not necessary for us to pronounce on this aspect, since that is a matter on which-petitioners would have filed their objections. We need only state that the State Government should have considered the objections in approving the scheme with or without modifications or in rejecting the scheme altogether.
43. Yet another argument was that the respondent discriminated in excluding from the purview of the scheme, All India Tourist Services, Taxi Cabs etc., We need only state that Section 99 authorises the State Government to be selective in taking over Road Transport Services. The fact that some of the other Road Transport Services are not nationalised and therefore the proposed scheme is discriminatory, is an argument which cannot be countenanced. There are different types of Road Transport Services and the refusal to exclude such services cannot be held to be discriminatory. Even otherwise, the State is entitled to implement the policy of nationalisation, in a phased manner and need not take over all the services all at once.
44. Some submissions were made with regard to the wide disparity between the number of services proposed to be introduced viz., between 300 and 1000. It is submitted that such a wide gap is unrealistic and cannot give any effective notice to the objectors and therefore the proposal is defective in that regard. Government Pleader referred to a number of decisions to the effect that such defects are only curable. In view of the fact that the scheme has not been finally approved, we do not propose to deal with this question.
45. Yet another submission which counsel urged is that the publication of the draft scheme in form STU is defective for two reasons – (1) that the details mentioned therein apply only to stage carriages, and (2) that form STU was prescribed under the Motor Vehicles Rules, 1989, which were brought into force only on 1.9.1989, whereas the scheme was published in the official gazette on 19.8.1989.
46. We do not find any force in this submission because there is absolutely no difference between form STU under the Motor Vehicles Rules, 1972 and the rules framed under the 1988 Act. According to Section 217 of the 1988 Act, which deals with repeal and savings, rules framed, forms prescribed, orders issued, notifications made etc. under the old Act will survive till they are replaced by the corresponding instruments as prescribed under the new rules, if there is nothing inconsistent in the new Act. We are not persuaded to hold that the provision in Section 99 to “the effect that the State Government shall propose the scheme instead of the State Transport undertaking under Section 68-C of the 1939 Act involves any inconsistency between the old and new Acts. Therefore, the old rules and the forms prescribed thereunder survive; and as on the date of publication of the draft scheme, form STU prescribed under the old rules was valid and was rightly used to publish the draft scheme. For this reason we hold that this objection is also unsustainable.
47. In view of the above, we repel the contentions urged by the petitioners and therefore dismiss the Writ Petitions but subject to the observations contained in paragraph 41. Parties will suffer their respective costs. Government Pleader’s fee Rs. 300/- in each.
48. Counsel for the petitioner made an oral application for leave under Article 134-A of the Constitution of India. We have decided the Case with reference to the decisions of the Supreme Court having bearing on the question. In this view, we do not find any substantial question of law of general importance which needs to be decided by the Supreme Court. We, therefore, reject the application.
49. There is a further request for suspension of the judgment. In view of the fact that we are dismissing the application for leave, we reject the request for grant of stay.