If one person hears and another decides, then personal hearing becomes an empty formality.

 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 that principle, are bad. The second objection is that while the Act and the' Rules framed thereunder impose a duty on the State Government to give a personal hearing, the procedure prescribed by the Rules impose a duty on the Secretary to hear and the Chief Minister to decide. This divided responsibility is destructive of the concept of judicial hearing. Such a procedure defeats the object of personal hearing. Personal hearing enables the authority concerned to watch the demeanour of the witnesses and clear-up his doubts during the course of the arguments, and the party- appearing to persuade the authority by reasoned argument to accept his point of view. If one person hears and another decides, then personal hearing becomes an empty formality. We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure

Supreme Court of India

Gullapalli Nageswara Rao And ... vs Andhra Pradesh State Road ... on 5 November, 1958

Equivalent citations: 1959 AIR 308, 1959 SCR Supl. (1) 319

Road Transport-Nationalisation-Scheme proposed by State Trans-port Undertaking approved by Government-Procedure, if violative of fundamental rights-Scheme, if ultra vires-State Government, if must act judicially in approving the scheme Colourable legislation', Meaning of-Motor Vehicles Act (IV Of 1939), as amended by Act 100 of 1956, Ch. IVA, ss. 68C, 68D-Constitution of India, Art. 31.
HEADNOTE:
With a view to nationalise the road transport services under Ch. IV A of the Motor Vehicles Act, 1939 (IV Of 1939), inserted into it by the amending Act 100 of 1956, the General Manager of Andhra State Transport Undertaking published a scheme under s. 68C of the Act in the Official Gazette and invited objections thereto. By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Department, who was in charge of Transport, but were decided by the Chief Minister. The State Government approved of the scheme and published it in the Official Gazette. The petitioners, who were plying their buses on various routes in the Krishna District as permit-holders under the Act, apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme, applied to this Court for the protection of their fundamental rights to carry on their business. It was contended, inter alia, on their behalf, (i) that Ch. IVA of the Act was a piece of colourable legislation whose real object was to take over their business, under cover of cancellation of permits, in contravention of Art. 31 of the Constitution, (2) that the scheme itself was ultra vires the Act, for the reason, amongst others, that the State Government whose duty it was to act judicially in approving the scheme, had transgressed certain fundamental principles of natural justice. Held (Per curiam), that the question of colourable legislation was, in substance, really one of legislative competence of the legislature that enacted it. The legislature could only make laws within its legislative competence. Its legislative field might be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution. The legislature could not over-step the field of its competency, directly or indirectly. It would be for the Court to scrutinize if the legislature in purporting to make a law within its sphere, in effect and substance,
320
reached beyond it, it had infact the power to the law, its motive in making it would be irrelevant.
K. C. Gajapaji Narayan Deo v. The' State of Orissa, [1954] S.C.R. i, followed.
The State of Bihar v. Maharajadhiraja sir Kameshwar singh of darbhangha [1952] S.C R 889 considered
So judged; it could not said that CH. IVA of the Act was a colourable piece of legislation.
The power vested in the Regional' Transport Authority by s. 68F of the Act involved no transfer of business of the- ,existing permit-holders to the State Transport Undertaking- nor could the latter be said thereunder to take over any assets of the former. Section 68G of the Act in providing for compensation for un expired period of the permit did not imply that CH. IVA of the Act involved any transfer of property or possession so as to entitle the permit-holder to any compensation under Art. 31(2) Of the Constitution. Chapter 1VA of the Act did not, therefore infringe the fundamental right of the petitioners under' Art. 31 Of the Constitution.
Per Das, C. J., Bhagwati, and Subba Rao, jj.-While the purpose of s. 68C of the Act was no doubt to provide a scheme of road transport service on the lines prescribed by it, the scheme proposed might affect the rights of individual permit holders by excluding them, partially or completely, from the business in any particular route or routes, and the procedure prescribed by s. 68D and Rules 8 and 10 framed under the Act, required that the Government should hear both the objectors and the State Transport Undertaking before approving or modifying the scheme. There was no doubt, therefore, that the State was deciding a lis and it was to do so judicially.
Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621, Nagendra Nath Bora v. Commissioner, Hills Division, [1958] S.C.R. 124o and Express Newspapers Ltd. v. The Union of India, [1959] S.C.R. 12, relied on.
Franklin v. Minister of Town and Country Planning, [19481 A. C. 87, held inapplicable.
It was a fundamental principle of natural justice that the authority empowered to decide a matter must have no bias in it and another, no less fundamental, was that where the Act provided for a personal hearing the authority that heard the matter must also decide it. The procedure followed in the instant case whereby the Home Secretary, in charge of Transport, himself a party to the dispute, heard the objections and the Chief Minister decided them, violated those principles, and the order of the State Government approving the scheme, therefore,must be quashed. Per Sinha and Wanchoo, jj.-The sole object of Ch. IVA, of the Act was to nationalise the road, transport services and the inquiry envisaged by it was of a limited character. That inquiry
321
was meant to find out whether the scheme propounded was in public interest as required by s. 68C of the Act, and not to adjudicate rival claim of permit-holder on the one hand and the State Transport Undertaking on the other ; for, on approval of the scheme, exclusion of private transport as proposed by the scheme was bound to follow as a matter of course. There could, therefore, be no lis, and the Government in approving or modifying the scheme under Ch. IVA and the Rules framed thereunder must be held to act in its normal administrative capacity. No objections could be taken, in the instant case, to the procedure adopted by the Government in empowering the Secretary to hear objections while the Chief Minister decided them, and the Secretary could in no sense be a party to any dispute. Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621, Nagendra Nath Bora v. Commissioner, Hills Division, [1958] S.C.R. 1240 and Express Newspapers Ltd. v. The Union of India, [1959 S.C.R. 12, referred to.
Franklin v. Minister of Town and Country Planning, [19481 A.C. 87, applied.
Robinson v. Minister of Town and Country Planning, [1947] I All E. R. 851, referred to.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 100 of 1958. Petition under Article 32 of the Constitution for enforcement of fundamental rights.
M. K. Nambyar, K. Mangachari, G. Suryanarayana and P. V. R. Patachari, for the petitioners and intervener. M. C. Setalvad, Attorney General for India, R. Ganapathi lyer, P. R. Ramachandra Rao and T. M. Sen, for the respondents.
1958. November 5. The Judgment of Das, C. J., Bhagwati and Subba Rao, JJ., was delivered by Subba Rao, J. Sinha and Wanchoo, JJ., delivered separate judgments.
SUBBA RAO, J.-This is an application under Art. 32 of the Constitution for the enforcement of the petitioners fundamental right to carry on the business of motor transport in Krishna District in Andhra Pradesh, and for prohibiting the respondents from taking over the routes on which the petitioners have been plying their stage carriages.
41
322
The petitioners have been carrying on motor transport business in Krishna District for several years past by obtaining permits under the Motor Vehicles Act, 1939 (IV of 1939), as amended by Act 100 of 1956, hereinafter called the Act, in respect of various routes. They estimate the value of their investment in the -business at a sum of Rs. 20,00,000.
The amending Act inserted a new Chapter IV-A in the Act providing for the State Transport Undertaking running the business to the exclusion, complete or partial, of all other persons doing business in the State. Chapter IV-A provided for a machinery called the State Transport Undertaking, defined under s. 68-A(b) as an undertaking providing road transport service, to run the transport business in the State. In exercise of the powers conferred by s. 68-C of the Act, one Shri Guru Pershad, styled as the General Manager of the State Transport Undertaking of the Andhra Pradesh Road Transport, published a scheme for the purpose of providing an efficient, adequate, economical and properly coordinated transport service in public interest to operate the transport service mentioned therein with effect from the date notified by the State Government. Objections were in- vited within 30 days from the date of the publication of the proposal in the Official Gazette, viz., November 14, 1957. 138 objections were received. Individual notices were issued by the State Government by registered post to all the objectors. On December 26, 1957, the Secretary to Government, Home Department, in charge of transport, heard the objections. 88 of the objectors represented their cases through their advocates ; three of them represented their cases personally and the rest were not present at the time of hearing. After considering all the objections and after giving an opportunity to the objectors, their representatives and the representatives of the State Transport Undertaking the State Government found that the objections to the scheme were devoid of substance. On that finding, the State Government approved of the scheme in G.O. Ms. 58, Home (Transport IV), dated January 7, 1958, and the approved scheme was published in the
323
Andhra Pradesh Gazette dated January 9, 1958. The scheme was ordered to come into force with effect from January 10, 1958. The Government of Andhra Pradesh also established a Road Transport Corporation under the Road Transport Corporations Act, 1950 (LXIV of 1950), called the Andhra Pradesh Road Transport Corporation, with effect from January I I,' 1958, and by its order dated January 11, 1958, the said Corporation was empowered to take over the management of the erstwhile Road Transport Department. The said Transport Corporation is now implementing the scheme of nationalisation of bus transport under a phased programme. The petitioners, who are plying their buses on various routes in Krishna District, apprehending that their routes would be taken over by the Corporation pursuant to the aforesaid scheme, seek the aid of this Court to protect their fundamental right to carry on their business against the action of the State Corporation on various grounds. Mr. M.K. Nambiar, appearing for the petitioners, contends that the scheme, in pursuance of which the bus routes operated by the petitioners are sought to be taken over by the State Road Transport Corporation, is ultra vires and illegal on two grounds, viz., (a) that the provisions of Chapter IV-A of the Act violates the fundamental rights secured to the citizens by the Constitution and (b) that the scheme frained under the, Act is ultra vires the Act. The first ground is sought to be supported by the contention that Chapter IV-A of the Act, in substance and effect, authorizes the State to acquire the undertakings of citizens without providing for compensation for the entire undertakings and therefore it is a fraud on the Constitution, particularly on Art. 31 thereof. Shortly stated, his argument is that under Art. 31 of the Constitution no law shall be made for the transfer of ownership or right to possession of any property to the State or to a Corporation without fixing the amount of compensation or specifying the principles on which compensation is to be determined and given, and that Chapter IV-A of the Act is a colourable legislation enabling such a transfer of ownership without providing
324
for compensation for the property transferred, under the guise of cancellation of a permit.
To appreciate this argument it would be convenient, at this stage, to read the relevant provisions of the Articles of the Constitution, omitting the words unnecessary for the purpose of this case.
Art. 191 : All citizens shall have the right- (g) to practise any profession, or to carry on any occupation, trade or business.
(6) 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 prevent the State from making any law relating to--
(i)......................................................... (ii) the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
Art. 311: No person shall be deprived of his property save by authority of law.
(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any 'Court on the ground that the compensation provided by that law is not adequate.
(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation owned or controlled by the State, it shall not be deemed to
325
provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property."
The Constitution (First) Amendment Act of 1951, which came into force on June 18, 1951, amended cl. (6) of Art. 19 by adding sub-cl. (ii) to that clause, along with other amendments. Clause (2) of Art. 31 has been amended, and cl. (2A) has been inserted by the Constitution (Fourth) Amendment Act, 1955. Clause (2A) has been inserted with a view to supersede the majority decisions of this Court in the cases of State of West Bengal v. Subodh Gopal Bose (1), Dwarkadas Shriniwas of Bombay v. Sholapur Spinning and Weaving Co. Ltd. (2) and Saghir Ahmed v. State of U.P. (3). In Subodh Gopal's case, a majority of a Bench of this Court held:
Clauses (1) and (2) of Art. 31 are thus not mutually exclusive in scope and content, but should in my view, be read together and understood as dealing with the same subject, namely, the protection of the right to property by means of the limitations on the State power referred to above, the deprivation contemplated in clause (1) being no other than the acquisition or taking possession of property referred to in clause (2)." In Dwarkadas's case (1),this Court, while confirming the aforesaid principle, held that the word 'acquisition' has quite a wide concept, meaning the procuring of property or the taking of it permanently or temporarily and need not be confined to the acquisition of legal title by the State in the property taken possession of In Saghir Ahmed's case (3) applying the said principles, this Court held (at p. 728):
" If the effect of prohibition of the trade or business of the appellants (citizens) by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of Art. 31 (2) of the Constitution, does not the legislation offend against the provision of that clause inasmuch as no provision for compensation has been
made in the Act? "
(1) [1954] S.C.R. 587, 608.
(2) [1954] S.C.R. 674.
(3) [1955] 1 S.C.R. 707, 728.
326
It may be noted that though the said decision was given after the Constitution (First) Amendment Act 195 1, amending Art. 19 (6), it dealt with a matter that arose before the said amendment came into force. In the aforesaid decisions, this Court by a majority broadly laid down the two principles: (a) that both cls. (1) and (2) of Art. 31 dealt with the doctrine of 'eminent domain'; they dealt with the topic of 'compulsory acquisition of property'; and (b) that the word `acquisition' does not necessarily imply acquisition of legal title by the State in the property taken possession of, but may comprehend cases where the citizen has been 'substantially dispossessed' of the right to onion the property, with the result that the right to enjoy property has been seriously' impaired or the value of the property has been 'materially' reduced by the impugned State legislation.
The Constitution (Fourth) Amendment Act, 1955, amended cl. (2) of Art. 31 and inserted cl. (2A) in that Article. The amendments, in so far as they are relevant to the present purpose, substitute in place of the words 'taken possession of or acquired' the words 'compulsorily acquired or requisitioned' and provide an explanation of the words `acquired and requisitioned' in cl. (2A). The result is that unless the law depriving any person of his property provides for the transfer of the ownership or right to the possession of any property to the State, the law does not relate to 'acqtuisition or requisition' of property and therefore the limitations placed upon the legislature under cl. (2) will not apply to such law. While realising this legal position brought about by the amendment to the Con- stitution, the learned counsel contends that the right to do business is property as held in Saghir Ahmad's case(1) and that Chapter IV-A of the Act in effect transfers ownership of that business to the Corporation, owned or controlled by the State, though not directly but by the dual process of preventing the citizen from doing the business and enabling the Corporation to do the same business in his place and that that result is effected by a device with a view to avoid payment of
(1) [1955] i S.C.R. 707, 728.
327
compensation for the entire business so transferred. The colourable nature of the legislation, the argument proceeds, lies in its device or contrivance to evade limitations imposed under Art. 31 (2). To solve the problem presented, it is necessary to have a correct appreciation of the phrase `colourable legislation'. This Court considered this question in The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga(l). In that case the constitutional validity of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), was questioned. In the context of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), it was contended that the impugned Act was a fraud on the Constitu- tion and therefore void. It -was stated that the Act, while pretending to comply with the Constitutional provisions when it provided for the payment of compensation, in effect produced a scheme for non-payment of compensation by shift or contrivance. Mahajan, J., as he then was, in rejecting the argument observed at p. 947, thus:
" All these principles are well-settled. But the question is whether they have any application to the present case. It is by no means easy to impute a dishonest motive to the legislature of a State and hold that it acted mala fide and maliciously in passing the Bihar Land Reforms Act or that it perpetrated a fraud on the Constitution by enacting this law. It may be that some of the provisions of the Act may operate harshly on certain persons or a few of the zamindars and may be bad if they are in excess of the legislative power of the Bihar Legislature but from that circumstance it does not follow that the whole enactment is a fraud on the Constitution. From the premises that the estates of half-a- dozen zamindars may be expropriated without payment of compensation, one cannot jump to the conclusion that the whole of the enactment is a, fraud on the Constitution or that all the provisions as to payment of compensation are illusory."
The aforesaid observations lend support to the argument that the doctrine of colourable legislation imputes dishonest motive or mala fides to the State
(1) [1952] S.C.R. 889.
328
making the law. But, Mukherjea, J., as he then was, clarified the legal position in K. C. Gajapati Narayan Deo v. The State of Orissa (1). It was contended in that case that the Orissa Estates Abolition Act, 1952, was a colourable legislation and as such void. Adverting to that argument, Mukherjea, J., as he then was, says at p. 10 thus: " It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a statute is constitutional or not is thus always a question of power......... ...... If the Constitution of a State distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamedtal rights, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers. Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression 'colourable legislation' has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears on proper examination, to be a mere presence or disguise. As was said by Duff, J., in Attorney-General for Ontario v. Reciprocal Insurers (1924 A. C. 328 at p. 337): " Where the law making authority is of a limited or qualified character it may be necessary to examine (1) [1954] S.C.R. i.
329
with some strictness the substance of the legislation for the purpose of determining what is that the legislature is really doing.'
In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject-matter in substance is, something which is beyond the powers of that legislature to legislate upon, the form in which the law is clothed would not save it from condemnation. The legislature cannot violate the constitutional prohibitions by employing an indirect method."
We have quoted the observations in extensor as they neatly summarise the law on the subject. The legal position may be briefly stated thus: The legislature can only make laws within it legislative competence. Its legislative field may be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution. The legislature cannot over-step the field of its competency, directly or indirectly. The Court will scrutinize the law to ascertain whether the legislature by device put-ports to make a law which, though in form appears to be within its sphere, in effect and substance, reaches beyond it. If, in fact, it has power to make the law, its motives in making the law are irrelevant.
The learned counsel for the petitioners can only succeed if he can establish' that the provisions of Chapter IV-A constitute colourable legislation within the meaning of the aforesaid definition. To test the validity of the argument, it may be summarised thus : Business is I property' within the meaning of Art. 191 (g) of the Constitution. Chapter IV-A of the Act transfers the business to the Corporation controlled. by the State Government. Such a law should have provided for payment of compensation for the business transferred to the State Corporation ; instead, it adopted the device of cancelling the permit of the citizen and giving it to the Corporation and providing compensation to the citizen only for tile unexpired period of the permit. 42
330
We shall now proceed to ascertain whether any of the aforesaid ingredients of device or contrivance are established in this case. Does Chapter IV-A, in effect and substance, authorize, in law or fact, the transfer of the business of the citizens to the State or a Corporation, owned or controlled by the State ? Under Art. 191 of the Constitution, every citizen has a fundamental right to carry on any business subject to reasonable restrictions imposed by the State under cl. (6) of Art. 19 in the interest of the general public. The Constitution (First) Amendment Act, 1951, reserved to the State the right to make law for carrying on by the State or by a Corporation, owned or controlled by the State, any business to the exclusion, complete or partial, of the citizens or otherwise. The Constitution, therefore, enables the State to make a law placing reasonable restrictions on the right of a citizen to do business or to create a monopoly or to make a law empowering the State to carry on business to the exclusion of a citizen. The right to carry on business in transport vehicles on public pathways is certainly one of the fundamental rights recognized under Art. 19 of the Constitution. The Motor Vehicles Act, 1939 (IV of 1939), regulates the right of a citizen to carry on the said business for protecting the rights of the public generally. 'Permit' is defined under cl. (20) of s. 2 of the Act to mean the document issued by the Commission or a State or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage or stage carriage, or authorising the owner as a private carrier or public carrier to use such vehicle. Section 57 of the Act prescribes the procedure for applying for and granting permits to carry on the business in transport vehicles on public highways. Section 47 lays down the matters to be considered by the Regional Transport Authority in the disposal of applications for such transport carriers. Section 59 gives the conditions of every permit and also prohibits the transfer of permit. from one person to another except with the permission of the Transport Authority. Under s. 60, the Transport Authority which granted permit may cancel the permit or may suspend it for
331
such period as it thinks fit for any of the reasons mentioned therein. Section 61 provides for cases where, a permit-holder dies. That section enables the success-. sor to use the permit for a period of three months and to get the permit transferred to him subject to the conditions laid down therein. Section 68-F authorises the Regional Transport Authority, for the purpose of giving effect to an approved scheme in respect of a notified area or notified route, to refuse to entertain any application for the renewal of any other permit, to cancel any existing permit, to modify the terms of any existing permit so as to render the permit ineffective beyond a specified date, and to reduce the number of vehicles authorised to be used under the permit. It is manifest from the aforesaid provisions that the Regional Transport Authority can, in exercise of its regulatory power conferred on it in the interest of the public, issue a permit to a 'person in regard to a stage carriage authorising him to use the same in a particular route for a particular period subject to the conditions laid down in the permit, suspend or cancel the same under specified conditions, and renew or refuse to renew the same after the expiry of the period subject to the conditions laid down in the Act. Under Ch. IV-A, if a scheme has been promulgated empowering the State Transport Undertaking to take on hand the transport service in relation to any area, route or portion thereof to the exclusion of any person, who has been carrying on the business in that route, the Transport Authority is empowered to cancel the existing permit and issue a permit to the State Transport Undertaking. It cannot be said that if the Transport Authority cancels the permit of a person carrying on his transport business in a route and gives it to another, the process in. volves a transfer of business or undertaking of the quondam permit-holder to the new entrant. Indeed the process does not involve even a transfer of the permit from one to another. The true position is that one permit comes to an end and another permit comes into being. The power of cancellation of a permit in favour of one and issuing a new permit to another are
332
necessary steps in the regulatory jurisdiction entrusted to the Regional Transport Authority. The business of one has nothing to do with the business of another; they are two independent businesses carried on under two different licences. If that be the true legal position in the case of issue of permits -before -Chapter IV-A was inserted in the Act, we cannot see that the power of cancellation of an existing permit and issuing one to the State Transport Undertaking should involve a transfer of the previous permit-holder's business to the State Transport Undertaking. The argument that the process contemplated by s. 68-F of the Act involves two integrated steps, viz., cancelling the existing permit and preventing the previous permit-holder from doing the business and then issuing a permit to a nominee of the State to enable it to do the same business and thereby, in effect and substance, transferring the business of the existing permit-holder to the State or its nominee, appears to be attractive, but, in our view, it is fallacious. It may be that by the said process the existing permit-holder is precluded from doing his business and it may also be that the State Transport Undertaking carries on a similar business; but by no stretch of language or extension of legal fiction can it be said that the State Transport Undertaking is doing the same business which the previous permit- holder was doing. If there is no transfer in the case of cancellation of a permit in favour of one and issue of a new permit to another, equally there cannot be any such transfer in the case of issue of a permit to the State Transport Undertaking. Looking at the business not simply from the standpoint of the right to do it or the activity involved in it, but also from the standpoint of its assets, it becomes clear that no assets pertaining to the business of the quondam permit-holder are transferred to the State Transport Undertaking. 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 possession of the entire assets of the business. It is no doubt true that in the context of the scheme of nationalisation he may not be able to make
333
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.
Lastly it is said that ss. 68-G of the Act which provides for payment of compensation to the holder of the permit, indicates that the legislature proceeded on the basis that the cancellation of a permit involved a transfer of property' from the previous permit-holder to the State. In our view, no such irresistible conclusion flows from the said provision; as the permit is cancelled before the expiry of the term fixed therein, the legislature thought it fit and proper to give some compensation to the permit-holder who is prevented from doing his business for the unexpired period of the permit. Whether it is enacted by way of abundant caution, as the learned Attorney General says, or the provision is made by the legislature to mitigate the hardship that is caused to the permit-holder by the premature cancellation of the permit, we find it difficult to draw the inference from the said provision that the legislature assumed that a transfer of the business is involved in the process laid down in Chapter IV-A. We therefore bold that Chapter IV-A of the Act does not provide for the transfer of ownership or the right to possession of any property to the State or to a Corporation, Owned or controlled by the State. Under Art. 31 of the Constitution unless there is such a transfer, the law shall be deemed not to provide for compulsory acquisition or requisition of property ; and therefore, in such a case, no compensation need be provided for under Art. 31(2) of the Constitution. We therefore hold that Chapter IV-A of the Act does not infringe the fundamental right of the petitioners under Art. 31 of the Constitution of India.
The next argument of the learned counsel for the petitioners is that even if Chapter 1V-A of the Act is constitutionally valid, the petitioners could be deprived of their rights only in accordance with the law enacted for the purpose and in the manner provided
334
therein, and that in the present case, the scheme was promulgated in derogation of the provision of the said Chapter. The learned counsel contends that the provisions of Bs. 68-C and 68-D have not been complied with in framing the scheme. The learned counsel's contentions in this regard fall under different sub-heads, and we shall proceed to consider them seriatim.
The first contention is that no State Transport Undertaking is constituted under the Central Act and therefore the scheme initiated by the said Transport Undertaking constituted under the Motor Vehicles (Hyderabad Amendment) Act, 1956, ",as bad. To appreciate this argument some of the facts may be stated. Before the State of Andhra Pradesh was formed in November 1956, eight districts, popularly called the Telengana, which are now in the Andhra Pradesh State, were formerly part of the Hyderabad State. On September 29, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956, became law, whereunder Chapter IV-A was inserted in the Central Act in its application to the State of Hyderabad. Under s. 68_ A of Chapter IV-A of that Act, the State Transport Undertaking was defined to mean the Road Transport Department of the State providing road service. Under that Act, therefore, the Road Transport Department of the Hyderabad State was functioning as a statutory authority. After the States Reorganisation Act came into force, the said eight districts of the Hyderabad State became part of the State of Andhra Pradesh; with the result that the Road Transport Department of the Hyderabad State became the Road Transport Department of the State of Andhra Pradesh, though it was exercising its powers only in respect of that part of the Andhra Pradesh State, popularly known as Telengana. After the Andhra Pradesh State was formed, Sri Guru Pershad, styled as the General Manager of the Andhra Pradesh Road Transport Undertaking, published the scheme under s. 68-C of the Act. The argument is that the State Transport Authority constituted under Chapter IV-A of the Hyderabad (Amendment) Act was not legally
335
constituted as the State Transport Undertaking under the Central Act and, therefore, the initiation of the scheme by the Hyderabad State Transport Undertaking, which has no legal status under the Central Act was bad. It is also pointed out that the State Transport Authority under the Hyderabad Act differs from that under the Central Act in the following three, respects: (1) statutory parentage; (2) character and constitution ; and (3) territorial jurisdiction; and therefore the authority constituted under the Hyderabad Act cannot function under the Central Act. This argument has no relevancy to the facts of the present case. We are not concerned in this case with a statutory authority created under one Act and pressed into service for the purpose of another Act, when the latter has adopted the said statutory authority as one constituted under that Act. Here there is the Andhra Pradesh Road Transport Department providing road transport service in Telengana, which is a part of that State, and that Department, when it was a part of the Hyderabad State was functioning as part of the Hyderabad State Secretariat. The mere fact that the Road Transport Department of the Andhra Pradesh State was originally part of a department of another State and came under the definition of the State Transport Undertaking of the Hyderabad Act could not make the said department any the less the Road Transport Department of the Andhra Pradesh State. Assuming. for a moment that the Hyderabad Act is still in force in the Telengatia area, there is nothing in law which prevents a department coming under the definition of two statutes. Under the Act, the State Transport Undertaking means an Undertaking providing road trasport service where such undertaking is carried on by a State Government. This section does not prescribe the parentage of the undertaking or impose a condition that the undertaking should be providing transport service throughout the State. The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking. The citation from Salmond on, 336
Jurisprudence to the. effect that the law in creating legal persons always does so by personifying some real thing does not touch the question that falls to be decided in this case; for, the real thing, viz., the department, falls under the definition of both the Acts and therefore it can function as a statutory authority under both the -Acts. We therefore hold that the Road Transport Department of the Andhra Pradesh Government is a State Transport Undertaking under the Central Act and therefore it was within its legal competence to initiate the scheme.
The next objection raised is that the scheme was published by Sri Guru Pershad, the General Manager of the State Transport Undertaking and that it has not been established that he had been legally authorized to represent the State Transport Undertaking, the statutory authority constituted under the Act. We have already held that the Transport Department of the disintegrated Hyderabad State continued to function as the Transport Department of the Andhra Pradesh State after the merger of Telengana areas with the Andhra State. In the affidavit filed by the petitioners, it is stated that Sri Guru Pershad was the General Manager of the Road Transport Department of the erstwhile Hyderabad State, that he was never appointed as the General Manager of the State Transport Undertaking of the Andhra Pradesh State and that, therefore, he had no legal authority whatever to publish the scheme. In the counter affidavit filed on behalf of the first respondent, it is averred that the General Manager of the Andhra Pradesh Road Transport, which was a State Transport Undertaking within the meaning of s. 68-B of the Act, prepared a scheme and that was published in the Andhra Pradesh Gazette on November 14, 1957. It is therefore a common case that Sri Guru Pershad was the General Manager of the Road Transport Undertaking of the erstwhile Hyderabad State. It is not denied that Sri Guru Pershad continued to be the General Manager of that Department functioning in Andhra Pradesh. We have already held that the same department was the statutory authority functioning under
337
the Central Act. Sri Guru Pershad was also the General Manager of that undertaking. In the circumstances, there is no substance in the contention that Sri Guru Pershad should have been appointed as the -General Manager of the Undertaking under the Central Act. This is the first argument under a different garb. The preexisting Road Transport Department of the erstwhile Hyderabad State, with its General Manager, Sri Guru Pershad, continued to function as a statutory authority under the Central Act and therefore he had the legal authority to represent the State Transport Undertaking, which was a statutory authority. lie published the scheme and subscribed it as Guru Pershad, the General Manager of the State Transport Undertaking (Andhra Pradesh State Road Transport). The notification, therefore, must be held to have been issued by the State Transport Undertaking functioning under the Central Act.
The learned counsel then contends that the scheme published does not disclose that the State Transport Undertaking was of the opinion that the scheme was necessary in the interests of the public and, therefore, -is the necessary condition for the initiation of the scheme was not complied with, the scheme could not be enforced. Section 68-C says that where any State Transport Undertaking is of opinion that for specified reasons it is necessary in the public interest that road port service should be run or operated by the Transport Undertaking, it may prepare a scheme giving particulars of the scheme and publish it in the Official Gazette. An express recital of the formation of the opinion by the Undertaking in the scheme is not made a condition of the validity of the scheme. The scheme published in terms of the section shall give particulars of the nature of the service proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto. It is true that the preparation of the scheme is made to depend upon the subjective opinion of the State Undertaking as regards the necessity for such a scheme. The 43
338
only question, therefore, is whether the State Transport Undertaking formed the opinion before preparing the scheme and causing it to be published in the Official Gazette. The scheme published, as already noticed, was signed by Guru Pershad, General Manager, State Transport Undertaking, Andhra Pradesh Road Transport. The preamble to the scheme reads :
" In exercise of the powers conferred by section 68-C of the Motor Vehicles Act, 1939, it is hereby proposed, for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest, to operate the following transport services as per the particulars given below with effect from a date to be notified by the Government."
We have already held that Guru Pershad represented the State Transport Undertaking. The scheme was proposed by the said Undertaking in exercise of the powers under s. 68-C of the Act for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest. Except for the fact that the word 'opinion' is omitted, the first part of the section 68-C is incorporated in the preamble of the scheme ; and, in addition, it also discloses that the scheme is proposed in exercise of the powers conferred on the State Transport Undertaking under s. 68-C of the Act. The State Transport Authority can frame a scheme only if it is of opinion that it is necessary in public interest that the road transport service should be run or operated by the Road Transport Un- dertaking. When it proposes, for the reasons mentioned in the section, a scheme providing for such a transport undertaking, it is a manifest expression of its opinion in that regard. We gather from a reading of the scheme that the State Transport Undertaking formed the necessary opinion before preparing the scheme and publishing it. The argument of the learned counsel carries technicality to a breaking point and for the aforesaid reasons, we reject it. The next attack of the learned counsel centres round the provisions of s. 68-D (2) of the Act. It would be convenient, before adverting to his argument, to read 339
s. 68-D and the relevant rules made under the Act. They read :
Sec. 68-D : (1) Any person affected by the scheme published under s. 68-C may, within thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government. (2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter, if they so desire, approve or modify the scheme.
(3) The scheme as approved or modified under sub-section (2) shall then be published in the Official Gazette by the State Government and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route.
Provided that no such scheme which relates to any inter- State route shall be deemed to be an approved scheme unless it has been published in the Official Gazette with previous approval of the Central Government.
Rule 8 : Filing of objections (procedure)
Any person, concern or authority aggrieved by the scheme published under s. 68-C may, within the specified period, file before the Secretary to Government in charge of Transport Department, objections and representations in writing setting forth concisely the reasons in support thereof
Rule 9 : Conditions for submission of objections No representation or objection in respect of any scheme published in the Official Gazette shall be considered by the Government unless it is made in accordance with rule 8. Rule 10 : Consideration of scheme (Procedure regarding) :- After the receipt of the objections referred to above, the Government may, after fixing the date, time and place for holding an enquiry and after giving if they so desire, at least seven clear days' notice of
340
such time and place to the persons who filed objections under rule 8, proceed to consider the objections and pass such orders as they may deem fit after giving an Opportunity to the person of,being heard in person or through authorised representatives."
Under the section, the procedure prescribed for the approval of a scheme may be summarized thus : The State Transport Undertaking prepares a scheme providing for road transport service in relation to an area, to be run or operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons, and publishes it in the Official Gazette. Any person affected by the scheme may, within thirty days from the date of its publication, file before the Secretary to Government in charge of Transport Department objections and representations in writing with reasons in support thereof. After receiving the objections and representations, the Government fixes a date for the hearing and after giving an opportunity to the persons of being heard in person or by authorized representatives, considers the objections and then modifies or approves of the scheme.
The following procedure was in fact followed by the Government in this case: After the scheme was prepared and published in the Official Gazette, the petitioners and others filed objections before the Secretary to Government Transport Department, within the time prescribed. 138 objections were received and individual notices were issued by the Government by registered post to all. the objectors fixing the date of the hearing for December 26, 1957. The Secretary to Government, Home Department, in charge of Transport, heard the representations made by the objectors, some in person and others through their advocates, and also the representation is made by the General Manager of the Road Transport Undertaking. The Secretary, after hearing the objections, prepared notes and placed the entire matter, with his notes, before the Chief Minister, who considered the matter and passed orders rejecting the objections and approving the scheme; and the approved scheme was thereafter issued in the name of the Governor.
341
On the aforesaid facts, the first contention raised is that the State Government in approving the scheme was discharging a quasi-judicial act and therefore the Government should have given a personal hearing to the objectors instead of entrusting that duty to its Secretary. Secondly, it is stated that a judicial hearing implies that the same -person hears and gives the decision. But in this case the hearing is given by the Secretary and the decision by the Chief Minister. Thirdly, it is contended on the same hypothesis, that even if the hearing given by the Secretary be deemed to be a hearing given by the State Government, the hearing is vitiated by the fact that the Secretary who gave the hearing is the Secretary in charge of the Transport Department. The Transport Department, it is stated, in effect was made the judge of its own cause, and this offends one of the fundamental principles of judicial procedure. Lastly, it was pointed out that though the enquiry was posted for hearing on December 26, 1957, even before the enquiry was commenced, the Chief Secretary to the Government gave an interview to the 'Deccan Chronicle' and the I Golconda Patrika' to the effect that the Government bad already taken a decision to nationalize the road transport in Krishna District and some routes had been chosen, including the Guntur-Vijayawada route, thereby indicating that the Government has prejudged the case before holding the enquiry. The learned Attorney General counters the said argument by stating that the State Government strictly followed the procedure prescribed under s. 68-C of the Act, that the said Government, being an impersonal body, (gave the hearing through the machinery prescribed by law, that the said Government was discharging only an administrative act and not a judicial act in the matter of approving the scheme, that even if it did perform a judicial act, the Home Secretary in charge of Transport Department had only collected the material and the final orders were made only by the Chief Minister and that the Secretary's press interview was nothing more than a mere indication of the factum of the proposed scheme.
342
At the outset it would be convenient to consider the question whether the State Government acts quasijudicially in discharging its functions under s. 68-C of the Act. The criteria to ascertain whether a particular act is a judicial act or an administrative one, have been laid down with clarity by Lord Justice Atkin 'in Rex v. Electricity Commissioners, Ex Parte London Electricity Joint Committee Co. (1) elaborated by Lord Justice Scrutton in Rex v. London County Council, Ex Parte Entertainments Protection Association Ltd. (2) and authoritatively re-stated by this Court inProvince of Bombay v. Khusaldas S. Advani (3) . They laid down the following conditions: (a) the body of persons must have legal authority; (b) the authority should be given to determine questions affecting the rights of subjects and (c) they should have a duty to act judicially. In the last of the cases cited supra, Das, J., as he then was, analysed the scope of the third condition thus at page 725:
" (i) that if a statute empowers an authority not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and
(ii)that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to the act and the subject opposing it, the final determination of the authority will yet be a quasi. judicial act provided the authority is required by the statute to act judicially." In the case In re Banwarilal Roy (4) Das, J., as he then was, said much to the same effect at page 800: " A judicial or quasi-judicial act, on the other hand, implies more than mere application of the mind (1) [1924] 1 K.B. 171.
(3) [1950] S.C.R. 621.
(2) [1931] 2 K.B. 215.
(4) [1944] 48 C.W.N. 766.
343
or the formation of the opinion. It has reference to the mode or manner in which that opinion is formed. It implies a proposal and an opposition' and a decision on the issue. It vaguely connotes 'hearing evidence and opposition' as Scrutton, L. J., expressed it. The degree of formality of the procedure as to receiving or hearing evidence may be more or less according to the requirements of the particular statute, but there is an indefinable yet an appreciable difference between the method of doing an administrative or executive act and a judicial or quasi-judicial act." This statement is practically in accord with the first proposition extracted above. This Court again, in Nagendra Nath Bora v. Commissioner of Hills Division (1) in the context of the provisions of Eastern Bengal and Assam Excise Act, 1910 (I of 1910), considered the scope of the concept of 'judicial act'. Sinha, J., who delivered the. judgment of the Court, made the following observations at page 408: " Whether or not an administrative body or authority functions as a purely administrative one or in a quasi- judicial capacity, must be determined in each case, on an examination of the relevant statute and the rules framed thereunder."
In Express Newspapers Ltd. v. The Union of India (2) this Court again reviewed the law on the subject to ascertain whether the Wage Board functioning under the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955) was only discharging administrative functions or quasijudicial functions. Bhagwati, J., made the following observation at page 613: " If the functions performed by the Wage Board would thus consist of the determination of the issues as between a proposition and an opposition on data and materials gathered by the Board in answers to the questionnaire issued to all parties interested and the evidence led before it, there is no doubt that there would be imported in the proceedings of the Wage Board a duty to act judicially and the functions (1) A.I.R. 1958 S. C. 398.
(2) A.I.R. 1958 S.C. 578.
344
performed by the Wage Board would be quasi-judicial in character."
The aforesaid three decisions lay down that whether an administrative tribunal has a duty to act judicially should be gathered from the provisions of the particular statute and the rules made thereunder, and they clearly express the view that if an authority is called upon to decide respective rights of contesting parties or, to put it in other words, if there is a lis, ordinarily there will be a duty on the part of the said authority to act judicially. Applying the aforesaid test, let us scrutinize the provisions of ss. 68-C and 68-D and the relevant rules made under the Act to ascertain whether under the said provisions the State Government performs a judicial act or an administrative one. Section 68-C may be divided into three parts: (1) The State Transport Undertaking should come to an opinion that it is necessary in public interest that the road transport service in general or any particular. class of such service in relation to any area or route or portion thereof should be run or operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons or otherwise ; (ii) it forms that opinion for the purpose of providing an efficient, adequate, economical and properly co-ordinated road transport service; and (iii) after it comes to that opinion, it prepares a scheme giving particulars of the nature of the services proposed to be rendered, area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and causes it to be published in the Official Gazette. The section, therefore, makes a clear distinction between the purpose for which a scheme is framed and the particulars of the scheme. To state it differently, though the purpose is to provide an efficient, adequate, economical and coordinated road transport service in public interest, the scheme proposed may affect individual rights such as the exclusion, complete or partial, of other persons or otherwise, from the business in any particular route or routes. Under s. 68-C, therefore, the State Transport Undertaking may propose a scheme affecting the proprietary rights
345
of individual permit-holders doing transport business in a particular route or routes.. The said proposal threatens the proprietary right of that individual or individuals. Under s. 68-D read with Rules 8 and 10 made under the Act, any person affected by the aforesaid proposed, scheme may file objections within the -prescribed time before the Secretary of the Transport' Department. Under the said provisions,. the State Government is enjoined to approve or modify the scheme after holding an enquiry and after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the matter in person or through authorised representatives. Therefore, the, proceeding prescribed is closely approximated to that obtaining in courts of justice. There are two parties to the dispute. The State Transport Undertaking, which is a statutory authority under the Act, threatens to infringe the rights of a, citizen. The citizen may object to the scheme on public grounds or on personal grounds. He may oppose the scheme, on the ground that it is not in the interest of the public or on the ground that the route which he is exploiting should be excluded from the scheme for various reasons., There is, therefore, a proposal and an opposition and the third party, the State Government is to decide that lis and prima facie it must do so judicially. The position is put beyond any doubt by the provision in the Act and the Rules which expressly require that the State Government must decide the dispute according to the procedure prescribed by the Act and the Rules framed thereunder, viz., after considering the objections and after hearing. both the parties. It therefore appears to us that this is an obvious case where the Act imposes a duty on the State Government to decide the act judicially in approving or modifying the scheme proposed by the Transport Undertaking.
The learned Attorney General argues that ss. 68-C and 68-D do not contemplate the enquiry in regard to the rights of any parties, that the scheme proposed is
44
346
only for the purpose of an efficient, adequate, economical and properly coordinated bus transport service and should relate only to that purpose and that, therefore, the enquiry contemplated under s. 68-D, though assimilated to a judicial procedure, does not make the approval of the scheme any the less an administrative act. To put it shortly, his contention is that the Government is discharging only an administrative duty in approving the scheme in public interest and no rights of the parties are involved in the process. There is some plausibility and attraction in the argument, but we cannot accept either the premises or the conclusions. The scheme proposed may exclude persons, who have proprietary rights in a route or routes. As we have pointed out, the purpose must be distinguished from the particulars in the scheme. The scheme propounded may exclude persons from a route or routes and the affected party is given a remedy to apply to the Government and the Government is enjoined to decide the dispute between the contesting parties. The statute clearly, therefore, imposes a duty upon the Government to act judicially. Even if the grounds of attack against the scheme are confined only to the purpose mentioned in s. 68-C-we cannot agree with this contention-the position will not be different, for, even in that case there is a dispute between the State Transport Undertaking and the person excluded in respect of the scheme, though the objections are limited to the purpose of the scheme. In either view the said two provisions, ss. 68- C and 68-D, comply with the three criteria of a judicial act laid down by this Court.
Support is sought to be drawn for this contention from the decision of the House of Lords in Franklin v. Minister of Town and Country Planning (1). As strong reliance is placed on this decision, it is necessary to consider the same in some detail. The facts of that case are: On August 3, 1946, the respondent, Lewis Silkin, as Minister of Town and Country Planning, prepared the draft Stevenage New Town (Designation) Order, 1946, under para. 1 of Schedule 1 to the New
(1) [1948] A.C. 87.
347
Towns Act, 1946, and on or about August 6, 1946, he caused the same to be published and notices to be given as prescribed by paragraph 2 of Schedule I to the Act. Thereafter objections were received from a number of persons, including the appellants. Accordingly, the respondent instructed Mr. Arnold Morris, an Inspector of the Ministry of Town and Country Planning, to hold a public local inquiry as prescribed by paragraph 3 of the said Schedule. Mr. Morris held the inquiry at the Town Hall, Stevenage, on October 7 and 8, 1946, and on October 25, made a report to the respondent in which he set out a summary of the sub. missions made and the evidence given by and on behalf of the objectors and attached thereto a complete transcript of the proceedings, which began with an opening statement by Mr. Morris giving a brief recapitulation of the reasons that had led to the designation of Stevenage as the site of a New Town. On November 11, 1946, the respondent made the order in terms of paragraph 4 of Schedule I to the Act. The appellants applied to the High Court to have the order quashed.. It was contended, inter alia, that the said order was not within the powers of the New Towns Act, 1946, or alternatively, that the requirements of the said Act have not been complied with; that the Minister who made the order had stated, before the Bill was made into law, that he would make the said order, and therefore he was biassed in any consideration of the said objections. The House of Lords held that the respondent's functions under the Act were only administrative and that he had complied with the provisions of the statute. In that view, the order of the Court of Appeal dismissing the applications filed by the appellants was confirmed. Lord Thankerton in his speech at page 102, observed thus:
"In my opinion, no judicial, or quasi-judicial, pinion, no duty was imposed on the respondent, and any reference to judicial duty, or bias, is irrelevant in the present case. The respondent's duties under s. 1 of the Act and sch. 1 thereto are, in my opinion, purely administrative, but the Act prescribes certain methods of or steps in, discharge of that duty.................... it
348
seems clear also, that the purpose of inviting objections, and, where they are not Withdrawn I of having a public inquiry, to be held by someone other than the respondent, to whom that person reports, was for the further information of the respondent in order to the final consideration of the Soundness of the scheme' of the
designation................... I am of opinion that no judicial duty is laid on the respondent in discharge of these statutory duties, and that the only question is whether he has complied With the Statutory directions to appoint a person to hold the public inquiry, and to consider that person's report.
At first sight the facts of this case may appear to have some analogy to those in the present case, but on "a deeper scrutiny of the facts and the provisions of the New Towns Act, 1946, and Chapter IV-A of the Act, they disclose essential differences in fundamentals. Under the New Towns Act, 1946, the following steps for developing a new town have been laid down: (1) It is left to the Minister's Subjective satisfaction, after consulting local authorities, who appear to him to be concerned, to make an order designating. a particular area as the site of the proposed new town ; (2) when he proposes to make an order, he prepares a draft of that order giving the necessary parti- culars and publishes it in the London Gazette calling for objections to the, proposed order within a prescribed time; (3) if any objection is made to the proposed order, he shall cause a public local enquiry to be held and shall consider the report of the person by whom the enquiry was held; and (4) any person desiring to challenge the validity of that order may apply to the High Court and he can get that order set aside only if he satisfies the Court that the order is not within the powers of that Act or that his interests have been substantially prejudiced by any requirements of that Act not having been complied with. The steps to be taken for nationalising the Road Transport under the Act are as follows: (1) The State Transport Undertaking, which is a statutory authority under the Act, proposes a scheme; (2) the scheme may provide that the road transport services 349
should -be run or operated by the State Transport Undertaking to the exclusion of a person or persons; (3) any Person, affected may file objections before the Government;(4) the Government following the rules of judicial procedure decides the dispute between the Undertaking and -the person or persons affected; (5)the dispute is not necessarily confined only to the question- whether the 'statutory requirements have been complied with, but may also relate to the question whether a particular person or persons should not. be excluded; and (6) a personal hearing should be given to both the parties by the Government..
A comparison of the procedural steps under both the Acts brings out in bold relief the nature of the enquiries contemplated under the two statutes. There, there is no lis, no personal hearing and even the public enquiry contemplated by a third party is presumably confined to the question of statutory requirements, or at any rate was for eliciting further information for the Minister. Here, there is a clear dispute between the two parties. The dispute comprehends not only objections raised on public grounds, but also in vindication of private rights and-it is required to be decided by the State Government after giving a personal' hearing and following the rules of judicial procedure. Though there may be some justification for holding, on the facts of the case before the House of Lords that that Act did not contemplate a judicial act-on that question we do not propose to express our opinion-there is absolutely none for holding in the present case that the Government is not performing a judicial act. Robson in 'Justice and Administrative Law', commenting upon the aforesaid decision, makes the following observation at page 533:
" It should have been obvious from a cursory glance at the New Towns Act that the rules of natural justice could not apply to the Minister's action in making an order, for the simple reason that the initiative lies wholly with him. His role is not to consider whether an order made by a local authority should be confirmed, nor does he have to determine a controversy between a, public authority and private interests.
350
The responsibility of seeing that the intention of Parliament is carried out is placed on him." The aforesaid observations explain the principle underlying that decision and that principle cannot have any application to the facts of this case. In I Principles of Administrative Law by Griffith and Street, the following comment is found on the aforesaid decision : After considering the provisions of s. 1 of the New Towns Act, 1946, the authors say-
" Like the town-planning legislation, this differs from the Housing Acts in that the Minister is a party throughout. Further, the Minister is not statutorily required to consider the objections. It is obvious, as the statute itself states, that the creation of new towns is of national interest."
At page 176, the authors proceed to state:
Lord Thankerton did not analyse the meanings of I judicial' and I administrative nor did he specify the particular factors which motivated his classification. It is permissible to conclude that he looked at the Act as a whole, applying a theory of interpretation similar to the rule in Heydon's Case (1584, 3 Co. Rep. 7a, 7b)." At page 178, they conclude thus:
" It is submitted, however, that the thoroughness with which the Courts analysed the statutes in the Errington, Robinson, Johnson and Franklin Cases and the emphasis which they have placed on the fact that their decisions have been based solely on the statute under consideration makes such an approach inevitable."
It is therefore clear that Franklin's Case is based upon the interpretation of the provisions of that Act and particularly on the ground that the object of the enquiry is to further inform the mind of the Minister and not to consider any issue between the Minister and the objectors. The decision in that case is not of any help to decide the present case, which turns upon the construction of the provisions of the Act. For the aforesaid reasons, we hold that the State Government's order under s. 68-D is a judicial act.