A. Sanjeevi Naidu and Others vs The Madras State Transport

M. Anantanarayanan, C.J.—These writ proceedings involve, essentially, the validity of a scheme said to have been framed and promulgated

by the first respondent, namely, the Madras State transport undertaking, here represented by its Director, Mr. T.V. Venkataraman, u/s 68-C of

the Motor Vehicles Act, 1939 (Chapter IV-A). The writs seek to restrain both the first respondent and the State of Madras (second respondent),

from proceeding further with this promulgated scheme, under the relevant sections of the law, on the grounds exhibited in the writ petitions. As is

well known, and I do not think that it is necessary, for this purpose, to proceed into the history of the prerogative writ of prohibition in the United

Kingdom, a writ of prohibition issues ex debito justitiae, where absence of jurisdiction can be demonstrated ; it is not the power to nationalise the

road transport service which is in issue, nor the scheme of the relevant sections ; what is claimed is that the promulgated scheme is altogether void,

and lacking in jurisdiction. When that is the case, it is for the State Government, carrying on the State transport undertaking, to promulgate the

scheme in a Valid manner u/s 68-C, and then to proceed further. The writs prayed for are thus to be strictly limited in their duration, and scope.

Indeed, Mr. M.K. Nambiyar for the petitioners did not dispute that this identical scheme whatever might be the subsequent objections thereto u/s

68-D, and whatever vicissitudes it might suffer u/s 68-E at a subsequent stage could be again validly notified in which his further procedure under

the scheme would be legally unassailable.

My learned brother is delivering a separate judgment of extensive traverse dealing in considerate detail with the vicissitudes of the arguments

advanced by the learned Advocate-General on behalf of both the respondents, during a protected hearing; how the defences to the prayers in the

writ proceedings were varied from stage to stage, in the affidavits so as to be hardly compatible with each other how at a subsequent stage, the

defence has been evolved that Mr. T.V. Venkataraman has framed and notified the scheme, under some delegation of power which could render

his act an act of the State Transport Undertaking carried on by the State Government ; how it has been faintly suggested that this scheme had

ministerial approval.

His exhaustive analysis renders it unnecessary for me to cover the ground again. I shall limit myself exhaustive analysis renders it unnecessary for

me to cover the ground again. I shall limit myself to a clarification of the two main issues, which appear to me to be Involved in these petitions.

Firstly, we have here a scheme validly promulgated u/s 68-C of the Act by the State Transport Undertaking carried on by the State Government

particularly bearing in mind the clarification by their Lordships of the Supreme Court in Kalyan Singh v. State of U.P. (1963) 1 S.C.J. 50 : AIR.

1962 S.C 1183 If the answer to this question s to be decidedly in the negative, then I am unable to see, whatever the merits of the scheme as

framed, and however greatly in good faith Mr. T.V. Venkataraman might have acted, how the respondents could proceed further, under the

relevant sections of the law with a scheme altogether lacking in validlity The only alter-native then would be to re-issue the scheme u/s 68-C of the

Act with the impress or sanction of the requisite authority; in other words, to convert it by such re-issue into a scheme really promulgated by the

State Transport undertaking carried on by the State Government. Secondly, there is the related question whether under some delegation of power

in the administrative correspondence made available to us, Mr. T.V. Venkataraman could claim that he was clothed with The necessary authority

to express the satisfaction of the State Transport Undertaking carried on by the State Government, that

for the purpose of providing an efficient adequate, economical and properly co-ordinated road transport service,

It was necessary in the public interest to frame, notify and implement the scheme It is, indeed not disputed by the learned Advocate-General that it

is the State Trans-port Undertaking carried on by the State Government that has to form this judgment. to frame the scheme, and to promulgate it

in the manner prescribed by the rules The precise difficulty is whether the scheme framed by Mr. T.V. Venkataraman, and notified with his

signature, has this status notwithstanding the fact that Mr T.V. Venkataraman is, indisputably, the Director or executive head of the State Transport

Undertaking appointed as such. Obviously, this matter will have to be viewed from the perspective, either that the scheme as framed and notified is

ex facie valid, or that, if it lacks this validity, it can be justified on the basis of a Valid delegation of authority or function. There is also a third and

related argument, put forward by the learned Advocate-General, that the policy of nationalisation was expressly approved by Government in

G.O.Ms. No. 2007 (Transport) Industries, Labour and Housing, dated 17th June, 1967, and hence that we ought not to inhibit the respondents

from proceeding further with the scheme under the Act, when, at least there has been this declaration of the intention of the Government to pursue

this policy to a finish.

At the first blush, it might well appear as if the writ petitions are sought to be sustained and pressed home, upon a very technical or formal basis.

Here it could be argued, we have a scheme framed by Mr. T.V. Venkataraman, who is admittedly the Director of the State Transport

Undertaking, and, as set forth in the counter-affidavit of Mr. Lakshminarayanan, Secretary to the Government in the Industries, Labour and

Housing Department, by virtue of his office the head of the department. Mr. T.V. Venkataraman himself claimed that as the Chief Executive

Officer of the State Transport Undertaking, he was competent to formulate and publish the scheme u/s 68-C of the Act. It could be contended that

delegation itself is needless, and that, even if the view be taken that delegation of power is essential, the administrative correspondence made

available to us at least shows that, without the prior approval of Government, Mr. T.V. Venkataraman was permitted to frame and notify such a

scheme u/s 68 C ; that is to say, he was permitted to act, in respect of this power u/s 68-C on his own authority and in his own right But as I shall

presently show, such a perspective misses altogether certain refinements which are both implied and expressed in the statute itself, and in recent

decisions of the Supreme Court. Since this matter involves careful analysis, I do not think that any apology is necessary for proceeding at once into

this aspect, which is really the heart of the controversy.

It is necessary, at the outset itself, to set forth verbatim (i) Sections 68-A, 68-G, 68-D and 68-E of the Motor Vehicles Act, (ii) Section 68 (i)

of the Act (iii) Rule 294-C and Rule 294-E of the Rules framed under the Act and (iv) the preamble to the scheme in form I, under Rule 294-C,

which was actually promulgated with the signature of Mr. T.V. Venkataraman. Since reference may be repeatedly necessary to the contents of

these sections and rules, I shall first set them forth before embarking in the analysis of the legal implications.

68-A. In this Chapter, unless the context otherwise requires :--?

(a) '' road transport service'' means a service of motor vehicles carrying passengers or goods or both by road for hire or reward ;

(b) ''State Transport Undertaking'', means any undertaking providing road transport service, where such undertaking is carried on by,:

(i) the Central Government or a State Government;

(ii) any Road Transport Corporation established u/s 3 of the Road Transport Corporations Act, 1950 ;

(iii) the Delhi Road Transport Authority established u/s 3 of the Delhi Road Transport Authority Act, 1950 ;

(iv) any municipality or any corporation or company owned or controlled'' by the State Government.

* * * * *

68-C. Where any State transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-

ordinated road transport set vice, it is necessary in the public interest that road transport services in general or any particular class of such service

in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking, whether to the exclusion,

complete or partial, of other persons or otherwise, the State Transport Undertaking may prepare a scheme giving particulars of the nature of the

services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed,

and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct.

68-D. (1) Any person affected by the scheme published u/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 the previous approval of the Central Government.

68-E. Any scheme published under Sub-section (3) of Section 68-D may at any time by cancelled or modified by the State Transport undertaking

and the procedure laid down in Section 68-C and Section 68-D shall, so far as it can be made applicable, be followed in every case where the

scheme is proposed, to be modified as if the modification proposed were a separate scheme.

* * * * *

68-I. (1) The State Government may make rules for the purpose of carrying into effect the provisions of this Chapter.

(2) In particular and. without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters,

namely:

(a) the form in which any scheme or approved scheme may be published tinder Section 68-C or Sub-section (3) of Section 68-D ;

(b) the manner in which objections may be filed under Sub-section (1) of Section 68-D ;

(c) the manner in which objections may be considered and disposed of under Sub-section (2) of Section 68-D ;

(d) the manner of service of orders under this Chapter ;

(e) any other matter which has to be, or may be prescribed.

Rule 294-C. Every scheme for road transport service and every scheme proposing modification of an approved scheme prepared by the State

transport undertaking shall be published by the State transport undertaking in Form I or I-A as the case may be, in the Fort St. George Gazette. A

copy of every scheme as proposed to be published in the Fort St. George Gazette, shall be submitted to the Government by the State transport

undertaking.

Rule 294-E. Apart from the publication in the Fort St. George Gazette, all schemes formulated by the State transport undertaking and all

schemes approved or modified by the Secretary to Government, Home Department, on behalf of the State Government shall be published at least

in one daily newspaper circulating in the area involved. Copies of the schemes shall also be put up on the notice boards of the Secretariat and

offices of the State transport undertaking, the State Transport Authority and the Regional Transport Authorities concerned.

Preamble of the scheme promulgated.

Whereas the State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-

ordinated road transport service, it is necessary in the public interest that the passenger transport service in relation to the area/route specified in

the Schedule I hereunder should be run and operated by the Madras State Transport Department:

And whereas the State transport undertaking have prepared a scheme for the purpose, as set out in the Schedule II hereunder the same is hereby

published for the information of the public as required u/s 68-C of the Motor Vehicles Act, 1939.

Before proceeding to the authorities upon the main argument, which arises on the framing and promulgation of the scheme by Mr. T.V.

Venkataraman, I would like to emphasise the implications of the language employed in. several of the sections themselves. Those implications

derive considerable reinforcement and authoritative support, from the observations of their Lordships of the Supreme Court in more than one

decision, particularly in Kalyan Singh''s case (1963) 1 S.C.J. 50 : AIR 1962 S.C. 1183. As will be clear from a perusal of Section 68-A, Sub-

clause (b), State transport undertaking may be of several categories. For instance, a State transport undertaking can be a road transport

corporation established u/s 3 of the Road Transport Corporation Act, 1950--(section 68-A (b) (ii)) ; it could be the Delhi Road Transport

Authority ; it could be a municipality 61 a corporation or company owned or controlled by the State Government. It could also be an undertaking

carried on by the Central Government or an undertaking carried on by the State Government. In the present case, it is the State Government which

carries on the State transport undertaking of Madras, and, indisputably, that undertaking is a part of Government, or a department of Government.

That is so, by explicit admission. Another important matter that we may note, at the outset itself, is that sections, 68-C, 68-D, 68-E and 68-F

provide for a continuous statutory procedure of nationalisation of road transport. That procedure has to commence with the subjective satisfaction

of the State Transport undertaking, upon several factors or ingredients, as Mr. Nambiyar has rightly stressed. The first is the objective of efficient

transport service ; the second is adequacy ; the third is economical and proper co-ordination ; fourth is public interest, and the final factor is,

whether such considerations involve the nationalisation of an area or route, totally excluding other persons such as private stage operators, or only

to a partial extent. Though we have authority for the view that this satisfaction can be validly arrived at in any manner, of which Courts can take

cognizance, and that such words. as in the opinion of, need not be necessarily embodied in the draft scheme, there can be no doubt whatever that

this satisfaction must be shown to have existed, when the scheme was framed and promulgated. At least one decision of the Supreme Court

supports the view that the presence or absence of such satisfaction, in respect of a statutory function which is an essential pre-requisite under the

statute, is justiciable.

If we suppose, for a moment, that the decision was not that of the State transport undertaking carried on by the State Government, nor could it

be possibly characterised as a decision of that legal entity, but was merely the decision of a particular officer, who could not, under the rules of

business, take such a decision at all the formidable argument behind the writ proceedings emerges clear. For, if we assume lightly and in a

superficial manner, that anybody who is the chief executive in such an undertaking could exercise such a statutory function, and that this is purely an

argument of form and not of substance, then the statutory function could have been exercised, not necessarily even by Mr. T.V. Venkataraman,

but by his assistant, or by any ministerial officer in the office. As I shall presently show, we have ample authority for the view that these are not the

implications of these sections, and that the exercise of the statutory function u/s 68-C, and the actual framing of the scheme in pursuance of the

satisfaction, are matters of considerable importance, likely to affect the rights and interests of many private persons which cannot be left to the not

empowered initiative of some particular officer, who has no-sanction for his act. Of course, if there is a valid delegation of power, that is another

matter, and it may be good defence. It is not necessary to dwell much upon Rules 294-C and 294-E, or on the form of scheme published under

the rules they are intended to carry out the implications of Section 68-C, and derive their support from the substantive section.

I shall immediately proceed to a review of the authorities made available to us, which throw some light on the question whether Mr. T.V.

Venkataraman could have framed and notified such a Scheme u/s 68-C, as though these were the acts of the State transport undertaking carried

on by the State Government. It appears to me to be very clear that he could not have done so, and that even the delegation, or the purported

delegation, relied on in the administrative correspondence, totally fails, when it is carefully scrutinised.

In Gullapalli Nageswara Rao and Others Vs. Andhra Pradesh State Road Transport Corporation and Another, , their Lordships were

concerned with a situation, the essence of which could be stated in the following form. When the Hyderabad State came to an end in. November,

1956, the road transport department of the Andhra Pradesh became the State transport undertaking, within the , meaning of the Hyderabad Act,

but that Act was in force only in the Telengana area. Chapter IV-A of the Motor Vehicles Act came into force in February, 1957, and, as this

applied to the whole State of Andhra Pradesh, the Hyderabad Act was deemed to have been repealed by necessary implication. Their Lordships

held that the fact that this undertaking was at that time providing road transport service only in a part of the State, did not render it anytheless the

State transport undertaking within the meaning of that term. The question arose in this case, whether the necessary element of subjective

satisfaction could be shown to have existed. In this case, the words in the opinion of were omitted, but the preamble to the scheme recited the

other factors of efficiency, adequacy, economical and proper co-ordination and public interest. Their Lordships held, in consequence, that to

require anything further, by way of proof, was to carry technicality to a breaking point. In this context, K. Gopala Krishnayya and Others Vs. State

of Andhra Pradesh and Another, , may also be referred to. As the division Bench held in that case, the failure to mention the words is of opinion,

was not in any way fatal to the scheme?

In Kashi Prasad Gupta Vs. Regional Transport Authority, Gorakhpur and Others, , a single Judge of that Court had to consider the argument

that where the scheme was framed not by the transport department, but by the Government itself, this was contrary to Section 68-C of the Act..

The learned Judge held, after an analysis of Articles 154, 162 and 166 of the Constitution, that state road transport was a matter falling within the

executive power of the Government and hence that the action has really to be that of the Government of the State, taken in the name of Governor,

under the Articles of the Constitution and the rules of business. The matter received detailed exposition in Kalyan Singh''s Case (1963) 1 S.C.J 50

: AIR 1952 S.C. 1183, which I have already referred to. The situation in that case was the precise converse of the situation in these writ

proceedings. The scheme was initiated, framed and notified by the State Government, precisely as in Kashi Prasad Gupta Vs. Regional Transport

Authority, Gorakhpur and Others, . The argument was that it is the State transport undertaking, a distinct jural entity, which has to form the opinion

and frame and publish the scheme, and that, as the State Government acted in the case, the scheme was not valid at all. After setting forth the

relevant provisions, their Lordships elucidated the legal implications in the following passages, at pages 1186 and 1187, which are of, considerable

importance in the present context. I, therefore, feel that no apology is needed for setting forth these passages verbatim here.

The effect of the said provisions, insofar as they are relevant to the present inquiry, may be stated thus : The State transport undertaking is an

undertaking providing road transport service which is carried on by the State or any other corporation or authority mentioned in Section 68-A. The

definition creates a statutory authority distinct from authorities which run it. This is made clear by Section 68-C, whereunder it is the State transport

undertaking that will have to form the requisite opinion.

* * * * *

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 contestants. 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 in charge of the undertaking and hears the objections and approves or modies the scheme in a manner without violating the

principles of natural justice.

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 State 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.

* * * * *

The opinion must necessarily be formed by somebody to whom under the rules of business the conduct of the business is entrusted and that

opinion, in law, will be the opinion of the State Government.

These passages cannot admit of any doubt in the interpretation of Section 68-C, or the application of that section of law to a situation of this

kind. Where a State transport undertaking is carried on by a State Government, whatever may be the case where the State transport undertaking

is of a different description, such as a municipality or a corporation or a company controlled by Government, or a distinct road transport

corporation, it is this undertaking which has to form the opinion and frame and notify the scheme. Some particular individual, like Mr. T.V.

Venkataraman, even though he may be the chief executive officer of this undertaking, cannot form an opinion and frame and publish the scheme,

unless, under the rules of business or by some delegation of power or function, he is clothed with the authority to do so on behalf of the State

Government, which carries on the undertaking. This point can be acutely illustrated by a simple example. In the present case, we have a

Government order, to which I shall make reference later, embodying a policy decision of Government that routes should be nationalised under a

phased programme. But, obviously, the question whether it should commence at a particular point of time, by the framing of a scheme u/s 68-C,

which routes should be taken up under that scheme, how far private operators should be permitted or totally excluded under the scheme of

nationalisation, are all vital matters, ;in regard to which an opinion has to be formed, and the scheme has to be framed, by the State Transport

undertaking carried on by the State Government, that is, by or authorisedly on behalf of the Government. Suppose this authority is lacking, and Mr.

V.V. Venkataraman, in good faith, thinking that he has the authority to do this, frames and promulgates the scheme, but the State Government has

a different view about the actual timing of the policy, or the commencement of nationalisation. The learned Advocate-General conceded that, in

such a contingency, it will obviously have to be the view of the State Government that should prevail, and the scheme itself would not be valid. The

weakest part of the affidavits filed before us, apart from the question of any delegation to which I shall separately refer, concerns the right, authority

or power of Mr. T.V. Venkataraman, to have arrived at this opinion, and to have framed the scheme at all.

As far as I am able to gather from the material made available to us, he has no such right or power, and he is simply not empowered to act u/s

68-C, in any such manner as to make that act that of the State Government or the State transport undertaking carried on by the State Government,

which is identical, in effect, according to the dicta in Kalyan Singh''s case (1963) 1 S.C.J. 50 : AIR 1962 S.C. 1183. If, it is argued, there is some

implied location of the power in Mr. T.V. Venkataraman, merely because he is the chief executive officer of the undertaking, the simple answer to

this would be that he is only the head of a department, according to the very averments in the counter-affidavits. Under the rules of business, which

have been made available to us, and also according to the entire scheme of the administration of Governmental matters from day to day, as we

understand it, the Minister in charge of the subject has to approve, or to take a decision, in every matter of any consequence; the concerned

Secretary expresses this approval or decision and it is then the act of the Government. As may learned brother has shown, in detail, the original

argument of the learned Advocate-General did not at all amount to this. The argument simply was that Mr. T.V. Venkataraman, head of the road

transport department, had formed the opinion, and framed the scheme, and that Government now stood by the scheme, so framed and notified.

This is a far different thing, from a Valid promulgation. The answer to it is the simple answer that nothing prevents the Government, or prevented

the Government, at any time during the protracted hearing of these petitions, from accepting the scheme as that of the State transport undertaking

carried on by the State, and duly notifying it as such. Until this was done, it was very difficult to see how Government could proceed further, on the

scheme framed and promulgated by Mr. T.V. Venkataraman, without due authority; for that matter, his assistant or his chief ministerial officer

could equally purport to do so.

In Samarth Transport Co. Private Ltd. Vs. Y.B. Chavan and Others, , an argument was put forward that Government could not both frame a

scheme u/s 68-C, and be the judge thereof under Sections 68-D and 68-E, and that this would be violative of the principles of natural justice. The

learned Judges of the division Bench held, that there was no such implicit conflict in the situation which would make the Government judge in their

own cause, and, indeed, the solution to this is expressly set forth in Kalyan Singh''s case (1963) 1 S.C.J. 50 : AIR 1962 S.C. 1183. Birajmohan

Das Gupta v. The State of Orissa and Ors. (1962) 1 S.C.R.681, need not detain us, because that related to the power of the transport controller

to actually publish the scheme, and all that the decision held was that the publication was valid. Certainly, as pointed out by their Lordships, the

prepared scheme has to be published by the State transport undertaking, and any requisite officer could do so, in the Gazette. The present attack

is the far more substantial one, that Mr. T.V. Venkataraman, by himself, could not arrive at this opinion, u/s 68-C, and frame and notify the

scheme. In any event, unless some authority is shown, which would render these acts of his, the acts of the State Government carrying on the

undertaking, they are necessarily lacking in sanction, and, therefore, invalid.

A similar situation arose in Chandra Kishore and Others Vs. State of Uttar Pradesh and Another, , before Oak, J. The argument was that

there was no State transport undertaking as such in Uttar Pradesh, and that the notification of the scheme was not in the prescribed form; those

arguments were met and repelled by the learned Judge.

This may be the convenient context, for reference being made to Articles 162 and 166 of the Constitution and in the rules of business, as made

available to us, and further to the question whether ex facie, Mr. T.V. Venkataraman, could claim that he had the requisite power to arrive at the

opinion and frame the scheme, u/s 68-C. As regards the formation of the opinion, the point that I would like to stress is not that the preamble, as

published, is not adequate; on the contrary it is in a form, which includes the ingredients u/s 68-G, and whether the words in the opinion of are

stated or otherwise, will not be relevant. But there is the very important point here, that the existence or non-existence of such an element of

satisfaction or formation of opinion, is certainly justiciable. A decision of great importance, in this context, is Hamdard Dawakhana (Wakf), Delhi

and Another Vs. Union of India (UOI) and Others, . Their Lordships observed at page 1172:

Mr. Pathack contends, and rightly, that the condition prescribed by the 1st part of Section 3 (1) of the Act is a condition precedent (formation of

opinion of necessity or expediency) and it is only when and after the said condition is satisfied that the power to issue a regulatory order can be

exercised by the Central Government....It is true, as Mr. Pathack contends, that in the absence of any specific averment....no presumption can be

drawn that such an opinion has been formed;....

In the present cases, the issue can be expressed in this brief argument. Some one, authorised to do so, has to form the opinion on behalf of the

State Government carrying on this undertaking, and to frame the scheme. All the matters that the scheme deals with, namely, the precise routes

taken up for nationalisation, the inclusion or exclusion of private operators, in whole or in part, etc., are vital matters, to be considered by the same

authority. Apart from the administrative correspondence about delegation of power or function, which I shall, for the moment, segregate, Mr. T.V.

Venkataraman, had no power to form this opinion, and to frame the scheme, as I understand the rules of business and the actual administration of

the Government. There is considerable confusion about the impact of the rules of business framed under Article 166 of the Constitution. A copy of

the rules has been made available to us, and it is very clear that, under the rules, different subjects have to be allocated, as between the different

Ministers; in other words, to be included in the respective portfolios. Only a very partial list of the subjects, as supposed to be inclusively classified

for such allocation, has been made available to Court. Certainly in this truncated or incomplete list, Transport and nationalised transport are

subjects allotted to the Minister for Public Works, M (W), and, according to Mr. Lakshminarayanan, this subject has to be dealt with by this

Minister, and he is the concerned Secretary. This matter itself is in considerable doubt, for Mr. Nambiyar has placed before us certain material to

show that Motor Vehicles Act is a classified subject, and, undoubtedly, the exercise of the power u/s 68-C would appear to fall under this

category. Very probably, Nationalised transport is a subject, the content of which can only be related to the point of time after the scheme has

been finally published under Sections 68-D and 68-E, and not before. Further, accepting, as argued by the learned Advocate-General, that

different Secretaries may function under the same Minister for differing subjects or branches, still Mr. Nambiyar has been able to show that rules

promulgated under the Motor Vehicles Act, or the State amendments themselves, have been Gazetted with the signature of the Home Secretary,

and not Mr. Lakshminarayanan.

However that might be, Mr. T.V. Venkataraman, who is only the executive head of this undertaking, and thereby the head of department,

cannot possibly arrive at this opinion, and frame and notify the scheme, under the riles of business, and the actual, conduct of the business of

Government. He may certainly send up proposals, and prepare a draft. But as I understand it, until and unless these acts obtain the approval of the

Government, or, which is the same thing of the State transport undertaking carried on by the Government, which approval has clearly to be

intimated through the concerned Secretary to the Government Mr. Venkataraman''s proposal can only remain a proposal for action u/s 68-C. He

Cannot, himself assume, or arrogate to himself that function.

On the matter of the importance of this principle, as a question of law, Mr. Nambiyar has referred to the well-known decision, Commissioner

of Police, Bombay Vs. Gordhandas Bhanji, . On the facts in that case, it was the Commissioner of Police, certainly a person subordinate to

Government, who was vested with the authority to grant or revoke a licence. It was held that the State Government could not usurp this function or

discretion; such an act would be invalid. In Godavari Shamrao Parulekar Vs. State of Maharashtra and Others, , the question has received

elaborate treatment whether the satisfaction, on behalf of the State Government, should be that of the Governor, or could be that of the Home

Minister. In this connection, I may also refer to King Emperor v. Sibnath Banerji 1945 L.R. 72 IndAp 241 : (1945) 1 F.L.J. 222 : (1945) 2

M.L.J. 325 : (1945) F.C.R. 195, where the Judicial Committee dealt with Rule 26 of the Defence of India Rules, in the light of Sections 49 and 59

of the Government of India Act, 1935 corresponding to Article 166 of the Constitution. Two passages from authoritative treatises have also been

relied on. The first is, Administrative Law by J.F. Garner (1963) edition), pages 112 and 113. This deals with procedural ultra vires, and refers to

Vine v. National Dock Labour Board L.R (1957) A.C. 488 : (1957) 2 W.L.R. 106 : (1956) 3 All E.R. 939, for an act beyond the scope of the

delegation. The author points out that procedural ultra vires under the several categories relating thereto,

applies, in short, to all persons who are empowered by statute to do anything.

Another passage of great interest is Administrative Law by H.W.R. Wade (1961) edition), page 51 which also refers to Vine''s case L.R (1957)

A.C. 488 : (1957) 2 W.L.R. 106 : (1956) 3 All E.R. 939, and it rests on the broad statement that where the power is confered upon some

particular body, and without any statutory authority that body allows some officer or employee to exercise it, this would be illegal, and beyond the

delegation. These authorities are pertinent to the present context, for, if the proposals had been sent by Mr. T.V. Venkataraman, including the draft

scheme, and the proposed scheme had been approved by the State transport undertaking carried on by the State Government, which, in effect,

means the approval of the Government, then further procedure under the present scheme would be perfectly legal. But where Mr. T.V.

Venkataraman assumes that he is the State transport undertaking carried on by Government, which he is not, and merely as the head of a

department, without any authority, express or implied, to act for Government in this matter, frames and publishes the scheme, he must certainly

held to have quite exceeded his power. Writs of prohibition must necessarily issue to restrain him from doing anything further, on such a notified

scheme. Matters, of course, can very easily be set right, by the re-publication of the scheme as one having the approval of Government carrying on

the State transport undertaking, as we repeatedly pointed out to the learned Advocate-General, during the course of arguments.

Before dealing with the delegation, I might deal very shortly with G.O.Ms. No. 2007, dated 17th June, 1967, since that has been relied upon.

Certainly, this proceeding does embody the opinion of Government approving the policy of nationalisation. It also embodies the decision of

Government with regard to the categories of routes that must be nationalised. There is the further decision that they should be nationalised as and

when the permits of the private operators expire and this Government order probably does empower Mr. T.V. Venkataraman to take all

proceedings, at the proper moment, for drawing up schemes including the preambles thereto, and obtaining the approval of Government. But it has

to be carefully noted that this Government order is not equivalent to any decision of the Government u/s 68-C of the Act. It is very explicable

preliminary decision thereto, but the Government order is not the commencement of any part of the statutory procedure under Sections 68-C, 68-

D and 68-E of the Act, including the most initial one of the framing and the notification of a scheme, by the State transport undertaking. The

argument of the learned Advocate-General that this Government order would be sufficient compliance with Section 68-C, cannot at all be

accepted. For, it is not referable to that statutory provision at all. It is what it purports to be, purely and simply, a record of a policy decision.

Having discussed these aspects so far, I propose to deal very briefly indeed with the matter of the actual delegation, for two reasons. Firstly,

my learned brother is dealing with it in great detail, and I cannot add anything to his exhaustive treatment. Secondly, it appears to me that the point

involved is a very simple one, what is the effect of the administrative correspondence that has been made available to us? If the effect of this

correspondence is not to establish any valid delegation of power or function to Mr. T.V. Venkataraman, which would have enabled him. to act u/s

68-C on behalf of the State transport undertaking, then I am quite unable to see how this material is really germane to the purpose, or what further

use we can make of it. As Mr. Nambiyar points out, once we concede that, in the case of a State transport undertaking, as this is, carried on by

the Government, Government must form an opinion and notify the scheme, though through their officers, then any delegation of such a statutory

power must either be derived from the statute itself, or from the rules thereunder. In the case of a statutory power or function, it is obviously

desirable that delegation should be derived from, the statute itself, be referable to it, and be limited to the scope of the phraseology used in the

statute.

There is no such delegation here, and this is conceded. For instance, if we assume that there is some independent State transport undertaking,

of one of the categories mentioned in Section 68-A, and a clerk of this undertaking purports to exercise the power in Section 68-C, it will at once

be obvious that this can be valid, only if it is sustained by an express delegation on the part of the officer who is empowered to act as representing

the undertaking. What has really happened in the present cases is very clear from the several documents, concerning one or two of which privilege

was fleatingly claimed at one stage of the arguments, but which have now been finally made available to Court. It appears that, with regard to the

implementing of the policy of nationalisation, Government authorised an ad hoc committee by G.O.Ms. No. 2008 (Tpt.), dated 17th June, 1967.

This included the Director of Transport, Mr. T.V. Venkataraman, the Secretaries to Government, Home and Finance and several other highly-

placed officers. It is clear that the Director, Mr. T.V. Venkataraman, prayed that a general order issued might be by Government, permitting him to

nationalise the routes. Committee seems to have approved this procedure and Mr. Lakshminarayanan, Secretary to Government, put up a brief

note about this to the Minister for Works. We are assuming, for the moment, that the Minister for works, had power to deal with matters u/s 68-

C, though this is extremely doubtful : Motor Vehicles Act is a distinct subject, and it is not, and has never been, included in his portfolio, as far as

we can judge. However that might be, I note that Mr. Lakshminarayanan sent a demi-official letter, dated 4th July, 1967, to Mr. T.V.

Venkataraman, agreeing to his, request for framing and notifying schemes without prior approval of Government. The words you may take action

accordingly follow this sentence. As far as we are able to judge, this cannot amount to any delegation of the power to arrive at an opinion u/s 68-

C, and to take action accordingly, including the vital aspect of the degree to which private operators on the routes to be taken up for nationalisation

are to be allowed to operate further, or are to be totally prevented from doing so. Where the statute and the rules are silent about any such

delegation, and that is indisputably so, such vague language, which amounts, in strict interpretation of the phraseology, only to the promise that

Government will not repudiate any such act is clearly not a delegation of the statutory power which Courts can recognise. The Government merely

agreed that Mr. T.V. Venkataraman, may act in this matter without their prior approval or sanction; conceivably this can amount to an assurance

that Government will subsequently ratify his acts. But this is the crux of the question. Until and unless Government accords such ratification and

adopts the scheme as that of the State Transport Undertaking it cannot be said that there is a scheme validly promulgated u/s 68-C. It is for this

reason that we repeatedly pointed out to the learned Advocate-General that all that is required is a publication of the scheme of Mr. T.V.

Venkataraman, in tact and as it appears, under the authority of Government. Once that is done the further steps u/s 68-D (1) would follow and

objections will have to be filed within thirty days of this. But until it is done, I cannot accept that there is any scheme in existence, which represents

an act, u/s 68-C by the State Transport Undertaking carried on by Government within the scope of Kalyam Singh''s case (1963) 1 S.C.J. 50 :

AIR 1962 S.C. 1183.

The writs of prohibition which we direct to issue are, thus, of a restricted scope and duration. They will operate only until the State Transport

Undertaking carried on, by the Government promulgates this scheme, that is, until it is made an act of"" the State Government, which carries on the

undertaking. The moment that is done, the writs of prohibition can no longer be operative, and the further procedure-will have to inevitably follow.

M. Natesan, J.

In this batch of writ petitions under Article 226 of the Constitution certain passenger bus transport operators question the validity of a scheme-

for nationalisation of certain bus routes published in the Fort St. George Gazette-dated 26th July, 1967, u/s 68-C of the Motor Vehicles Act

(Central Act IV of 1939), and pray for the issue of writs of prohibition, prohibiting further proceedings under the proposed scheme. The principal

ground of challenge to the scheme is that as the appropriate authority--according to the petitioners the State Government--has not formed an

opinion as required u/s 67-G of the Act that for the purpose of providing an efficient, adequate, economical and properly co-ordinated road

transport service the proposed scheme should be put : into operation in public interest, a condition precedent to the initiation of the scheme, the

promulgation of the scheme was invalid and the respondents had no jurisdiction to proceed further in the matter. Several other grounds questioning

the validity of the scheme have also been raised in one or other of the petitions; but as the above challenge to its validity goes to the root of the

matter and may quite properly be a. subject for a writ of prohibition, we heard arguments only on this ground of attack. The connected writ

appeal, Writ Appeal No. 326 of 1967, arises out of an order passed by our learned brother Kailasam, J., overruling the above contention on the

merits, in an interlocutory application for stay of further proceedings pending disposal of the main writ petition. The other writ appeals also arises

out of interlocutory orders. It is unnecessary, having regard to the question that falls for decision, to refer in. detail to the facts in the several

petitions. It will be sufficient to set out the facts in one of the cases, Writ Petition No. 2303 of 1967 on the interlocutory order from which. Writ

Appeal No. 326 of 1967, was preferred.

The petitioner in Writ Petition No. 2303 of 1967 was having a stage carriage permit on the route Madras (Broadway) to Cheyyar a distance

of 66 miles, and the permit in question was due to expire on 19th October, 1967. It was an inter-district route and in due course in May, 1967

itself he applied for renewal of the primary authority, the Regional Transport Authority, Chingleput, and the countersigning authorities, the Regional

Transport Authority, North Arcot, and the Regional. Transport Authority, Madras. While the Regional Transport Authority, Madras, notified his

application for renewal on 23rd June, 1967 itself u/s 57 (3) of the Motor Vehicles Act, 1939, the Regional Transport Authority, North Arcot,.

notified the application on 10th July, 1967 and the Regional Transport Authority,. Chengleput, on 1st August, 1967. No objections were filed

within the time before the Regional Transport Authorities, Madras and North Arcot. As the application for renewal was notified by the Regional

Transport Authority, Chingleput, only on 1st August, 1967 and meanwhile the impugned scheme u/s 68-C which would cover the route in question

was published, the Madras State Transport Undertaking, the first respondent herein, filed objections to the renewal of the permit on 9th August,

1967 on the ground that the undertaking proposed to ply its own vehicles on the route. Under the proposed scheme the first respondent intends to

take over routes extending over 75 miles, routes terminating at or starting from the City of Madras and all routes within the district of Kanyakumari

starting from or ending in the district. It is stated that on a rough estimate about 800 buses will be included in these categories. In applications for

interim relief in some of the petitions it was brought to our notice that the renewal applications in cases where permits were about to expire were

not taken into consideration even though the applications had been made well in advance and in normal course should have been disposed of

before the expiry of the permits. It is complained that deliberately even the consideration of applications for temporary permits pending decision on

the applications for renewal was being postponed.

The publication of the scheme in question is found in Part III of Fort St. George Gazette, (Extraordinary,) dated 26th July, 1967, containing

notifications by Heads of Departments, etc. It is headed as Scheme of State Transport Undertaking and is in form I under Rule 294-C of the

Madras Motor Vehicles Rules, 1949. The preamble ''to the notification runs thus:

Whereas the State Transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-

ordinated road transport service, it is necessary in the public interest that the passenger transport service in relation to the area/route specified in

the Schedule I hereunder should be run and operated by the Madras State Transport Department;

And whereas the State Transport Undertaking having prepared a scheme for the purpose, as set out in the Schedule hereunder, the same is hereby

published for the information of the public, as required u/s 68-C of the Motor Vehicles Act, 1939 (Central Act IV of 1939).

Then follows the scheme. The scheme is published under the subscription T.V. ""Venkataraman, Director, Madras State Transport Department. It

is contended for the petitioners that by reason of the definition of State Transport Undertaking found in Section 68-A of the Act, the State

Government as the undertaking should form the requisite opinion set out in the preamble to the notification before initiating the scheme and prepare

the scheme, and that it has not been so done. It is said that the Director of the State Transport Department only had the requisite opinion, and

prepared the scheme, and for that he had no legal sanction. It is argued that the various particulars required under the scheme are matters which

should be decided in the case of any particular route only by the Minister-in-charge of the subject under the allocation of the business of the State

by rules made under Article 166 (3) of the? Constitution and that no such decision had been taken by the concerned Minister. Another objection

taken is that under Article 166 (1) and (2) of the Constitution all executive action of the Government shall be expressed to be taken in the name of

the Governor and orders and instruments made and executed in the name of the Governor shall be authenticated in such manner as may be

specified in rules to be made by the Governor. It is submitted that the Director of the State Transport Undertaking is not a Secretary, Deputy

Secretary or an Assistant Secretary of the concerned department and so under the relevant rules is not entitled to initiate the proposed scheme by

notification in the Gazette. In the first counter-affidavit dated 12th September, 1967 filed on behalf of the first respondent which has been adopted

for the State of Madras impleaded as the second respondent, the petitioners, premises that the State Government must take the requisite opinion

u/s 68-C of the Act for initiating a nationalisation scheme under the provisions of Chapter IV of the Act is questioned. A definite stand has been

taken by the respondents that what is required u/s 68 C is that the State Transport Undertaking must form an opinion, and that it is unnecessary at

the stage of initiation of the scheme, to refer to the Minister or the Government. It is stated that Article 166 of the Constitution is not germane to the

issue at the stage when a scheme has been published calling for objections, and that the final decision alone is required to be taken by the

Government. In the language of the counter-affidavit sworn to by the Director of the State Transport Department.

The day-to-day administration of the State is carried on through the Heads of Department and their subordinates....

The Director of the State Transport Department, namely the 1st respondent. Is the Head of the Department. Consequently he is the chief executive

officer of the State Transport Undertaking of the Madras State and he is, therefore, competent to formulate and publish the schemes u/s 68-C of

the Act. In the context of the Act the State Transport Undertaking has to publish the scheme of nationalisation and the State Government has to

approve it. In the instant case the Madras State Transport Department has published the scheme following the general policy of the Government. It

is therefore, not necessary at this stage to refer to the Minister or the Government. Neither the Government nor any Minister can be construed as,

a State Transport Undertaking under this section.

After arguments commenced in these cases on the 19th October, 1967, the cases had to be adjourned for short intervals at the request of

Counsel on either side or to facilitate the respondents in placing before the Court record of all relevant proceedings prior to the actual publication

of the scheme. A number of counter-affidavits have been received from the respondents and a further affidavit has been filed for the petitioners. All

the affidavits were permitted by us, as we felt after hearing the arguments of learned Counsel for the petitioners on the 19th, that the stand taken,

for the respondents may not be tenable, and that the Advocate-General may better examine whether factually the Director had been authorised by

the Government to formulate the scheme. The affidavit on behalf of the petitioners sworn to on the 6th November and of the first and second

respondents sworn to on the 7th November, 1967 are in substantial agreement in setting out the circumstances in which the several subsequent

affidavits came on record. But it is necessary for us to refer to one matter in regard to which there is apparent divergence. In the counter-affidavit

of the Director, dated 7th November, 1967 filed as counter to the affidavit of the petitioner, dated 6th November, 1967 the first respondent states

that it is totally incorrect on the part of the petitioner to state in his affidavit that the Advocate-General admitted that neither the concerned Minister

nor the concerned Secretary had arrived at any opinion u/s 68-C. This is with reference to the averment in the affidavit for the petitioners to the

effect that the learned Advocate-General admitted that neither the concerned Minister nor the concerned Secretary had arrived at any opinion u/s

68-C, as it was the Director, who alone was competent to form an opinion. In our view, the difference in the versions is merely apparent and it is

all just semantics. In the affidavit of the first respondent it is admitted that the Advocate-General argued to the effect that it would be sufficient

compliance with the requirements of Section 68-C if the statutory authority, namely, the Director, the Madras State Transport Department had

formed the opinion and that it was not necessary for either the Minister or the Secretary to the Government to form the opinion u/s 68-C.

Admittedly, it is not the case of the respondents that either the concerned Minister or the concerned Secretary arrived at the opinion required u/s

68-C for initiating the scheme in question. No such case has been put forward or made out by record. Necessarily on the record the Advocate-

General had to state that he was not resting on the opinion of any concerned Minister or Secretary arrived at in terms of Section 68-C. With

reference to facts not contended for and not established when their existence is in issue, it matters little whether there is concession of their non-

existence or just non-committal silence. So far as the Court is concerned the facts simply do not exist.

Consequent on the remarks made by Court during the hearing of the cases, certain facts which preceded the publication of the scheme on the

26th day of July,. 1967 have been placed before Court by the respondents. In his affidavit, dated 20th October, 1967, Thiru T. N.

Lakshminarayanan, Secretary to the Government of Madras, Industries, Labour and Housing Department, dealing with the matter relating to the

nationalisation of bus transport at the Secretariat level, stated that the Madras State Transport Department is a department of the Government of

Madras and that the Director is the head of the department. It is averred in the affidavit that as the head of the department he exercised certain

powers. It is not stated in the affidavit whether as the head of the department the Director has been authorised or empowered to formulate

schemes of nationalisation of bus transport u/s 68-C and publish the same. But the affidavit brings out that the State Government has been

following a policy of progressive nationalisation of passenger transport and issuing Government orders from time to time. It is stated that in

G.O.Ms. No. 195 (Transport), Industries, Labour and Co-operation, dated 12th January, 1961, the Government laid down the policy for

operation of long distance express buses by the Madras State Transport Department on routes over 120 miles, that recently the State Government

considered carefully the question of extension of this policy, and in modification of the policy the Government issued an order G.O.Ms. No. 2007,

Transport, dated 17th June, 1967. A copy of this Government Order has been filed as annexure to the affidavit. We shall be referring to this

Government Order later.

A supplemental affidavit, dated 30th October, 1967 was filed by this Secretary. This affidavit brought out certain further proceedings that

preceded the publication of the impugned notification. By G.O.Ms. No. 2008 (Transport), Industries, Labour and Housing, dated 17th June,

1967, the Government of Madras directed that an ad hoc committee be constituted to work out the details in all aspects for implementing the

policy decision taken in G.O.Ms. No. 2007 above referred to. This committee is a broad based one representing several departments of the

Government with the Secretary to the Government, Industries, Labour and Housing Department, as the chairman. This committee was required to

submit its report within a fortnight. It is set out in the affidavit that the secretary of the committee requested the Director, the Madras State

Transport Department, to submit a note on the points which may be placed before the committee for discussion, and that the Director submitted on

17th June, 1967 a note to which was appended a list of routes, whose permits expired in the course of 1967-68. The Director appears to have

represented that in view of the large number of routes and having regard to the clear directive in the policy order, G.O.Ms. No. 2007, dated 17th

June, 1967 instead of obtaining administrative approval in each case on nationalisation separately he may be given general permission to nationalise

the routes whose permits expired in the interval. The committee in its proceedings at the meeting held on 24th June, 1967 accepted the proposal of

the Director that he be authorised to nationalise the routes as and when the permits of the private operators expired and send for the information of

the Government monthly reports. The Secretary states in his affidavit, dated 30th October, 1967 that by his letter, dated 4th July, 1967, the first

respondent was informed that his request for permission to publish the scheme of nationalisation in respect of the routes covered in G.O.Ms. No.

2007 without prior approval was agreed to by the Government and that he should take action accordingly. The original file containing the

proceedings was produced before us later on our directions. It is seen that after the proceedings of the committee held on 24th June, 1967 the

Secretary had a discussion of the matter with the concerned Minister, the Minister for works, and the Minister endorsed the grant of permission to

the Director of the State Transport Department to publish the scheme of nationalisation covered by G.O.Ms. No. 2007 without prior approval of

the Government. On this the Secretary sent a demi-official letter to the Director of the State Transport Department, the letter dated 4th July, 1967

referred to above, intimating him of the grant of the required permission and asking him to take action accordingly. We then have the impugned

notification in the Gazette on 26th July , 1967, Copies of the related proceedings G.O. Ms. No. 2008, dated 17th September, 1967 the note of

the Director of Madras State Transport Department requesting a general order permitting him to nationalise the routes whose permits expire in the

course of the financial year and a list of routes whose permits expired in 1967-68 submitted by him, the proceedings of the ad hoc committee held

on 24th June 1967, the note of the Secretary dated 4th July, 1967 which was endorsed by the concerned Minister and the demi-official letter,

dated 4th July, 1967 by the Secretary to the Director of the State Transport Department are all now on record.

Initially there was a claim for privilege for production of the aforesaid documents, though reference had been made in the counter - affidavit for

the respondents to the contents of the documents except of the note of the secretary dated 4th July, 1967 and of the fact of endorsement of the

same by the Minister. the documents referred to above when required by Counsel for the petitioners were not supplied, the learned Advocate-

General claiming privilege and submitting that he could not give copies of the documents. The claim of privilege was not made in proper form. That

apart privilege is claimed id respect of contents of documents and not the paper on which they are written When the contents of the documents

have been disclosed and set out in the affidavits, we see no purpose in the plea of privilege. A matter in respect of which privilege claimed and

sustained cannot be on the record and cannot be brought in as evidence in the But the respondents disclosed the contents of all but one of the

documents affidavits. The contents were disclosed voluntarily for their own case. M.K. Nambiyar for the petitioners referred to In re, Hinchliffe a

person Mr. Mind, Deceased (1895) 1 Ch. D. 117, and submitted that irrespective of any question as to discovery property, or privilege, if a

document was made an exhibit to an affidavit discovery who had the right to inspect and take copies of the affidavit has a similar right as to the

exhibit also. It was argued that the documents referred to in the affidavit formed as much part of the affidavit as if they had been actually annexed

and filed with it. It is, however, unnecessary to dwell on the claim of privilege as copies of all documents referred to in the affidavit, dated 30th

October 1967 were furnished later on 3rd November, 1967 and the relevant file was placed before the Court. In this background the petitioner in

Writ Petition No. 2303 of 1967 in his affidavit. dated 6th November, 1967 has gone to the extent of making the charge documents in question

would not have been in existence on the dates on which the earlier affidavits had been filed. This charge has naturally evoked the two lengthy

counter-affidavits, dated 7th November, 1967 already referred to one for each of the respondents repudiating the suggestion of the petitioner. In

their anxiety to absolve themselves from charges of change of case and shifting of the defence base. the respondents in their affidavits would avoid

reliance on further proceedings now brought out in evidence in support of their case and would state that all these materials were produced either

in answer to the queries or out of deference to the remarks of this Court. The Director of the State Transport Department in his affidavit, dated 7th

November, 1967, states:

The Court also remarked that in the interest of the parties it would be better that all the relevant documents are placed before the Court for its

perusal. The stand of the stage throughout has been based on the notification published in Fort St. George Gazette, dated 26th July, 1967, and

therefore, the statutory authority, as distinct from Government could form the opinion and publish scheme u/s 68-C of the Act. All the necessary

materials were produced either in answer to the queries of the Court or out of deference to the remarks of the Court.

While we are satisfied, having perused the original file and having regard to the course of events, that the petitioners charge, that these

documents could not have been in existence earlier is wholly unfounded, we cannot understand the attitude of the respondents, their disclaimer of

reliance on the subsequent proceedings for validating the impugned notification. One can understand a party litigant suspecting the prior existence

of the documents when there was no mention of them earlier, copies of the documents were refused while their contents were relied on, and the

scrutiny of the originals even by his Counsel withheld, particularly when at that stage there could be apprehension that the documents may turn the

scale against his contention. But we are unable to appreciate the reluctance on the part of the respondents in referring to the proceedings that

preceded the impugned notification and making them part of the record. Even in the counter-affidavit, dated 7th November, 1967, filed for the

second respondent there is a claim of privilege in respect of what may be of some assistance to the respondents, the note of the Secretary, dated

4th July, 1967, which was endorsed by the concerned Minister. In paragraph 6 of his counter-affidavit, the Secretary states:

The decision of the Government upon which the D. O. letter, dated 4th July, 1967 came to be issued is a confidential document made to me in

official confidence. I submit the public interests would suffer by its disclosure. Therefore I claim privilege for the said document containing the

decision of the Government.

The learned Advocate-General, when his attention was drawn to this paragraph, submitted that the claim for privilege may be ignored, A copy of

the note which carries the endorsement of the Minister has since been supplied to the petitioners, and the note also forms part of the record.

Having regard to the hesitancy exhibited by the respondents in producing the documents and making them part of the record and their assertion

even in the last of their counter-affidavits leading to an impressions that these documents, were not produced in support of their case but out of

deference to the remarks of this Court, I for my part feel that the respondents'' case should be confined to and considered on the defence first put

forward and persisted in right through, namely, that it is not necessary for either the Minister or the Secretary to the Government to form an opinion

u/s 68-C. But ex facie public interests are involved and it is that feature that made us despite some opposition from the petitioners to permit the

respondents to support the impugned notification on all available grounds. The Secretary in his last affidavit states that the Minister in charge of

works is the concerned Minister who deals with transport including : Motor Vehicles Act and nationalised transport, and that is the Minister that

had formed the necessary opinion. It is stated that the opinion having been formed the Director of the State Transport Department had been asked

to take action accordingly. In the context the reference can only be to the decision stated to have been taken by the Government on 4th July, 1967

evidenced by the endorsement of the Minister on the note of the deponent in respect of which privilege was claimed in the affidavit and later

waived. As the documents have ultimately become part of the record and the Advocate-General also addressed arguments based thereon we shall

examine also whether the impugned notification could be sustained by reference to these proceedings. But it has to be recorded that there is no

claim apart from the proceedings now brought out into the record that either the concerned Minister or the Secretary formed the requisite opinion

u/s 68-C. For the petitioners it is submitted that it is the Minister to whom the subject, Motor Vehicles Act, has been allotted under Article 166 (3)

by rules made by the Governor who has to take the decision, that the opinion must be formed by the Minister himself, and that there cannot be an

ad hoc authorisation to any other person to form the opinion. It is stated that there was actually no delegation of power u/s 68-C to form the

requisite opinion, and that Section 68-C does not contemplate any delegation of that function.

It will be convenient to set out the factual position as now crystallised leading to the impugned notification. On the 17th of June, 1967 the

Government issued G.O. Ms. No. 2007 which according to the respondents is only a policy decision but enough for guidance. On this policy

decision the Government constituted an ad hoc committee to work out details in all aspects for impelementing the policy decision. To this ad hoc

committee the Director of the State Transport Department submitted a note appending thereto a list of routes whose permits expired in the course

of 1967-68, making proposal that without taking prior administrative approval of the Government he may nationalise the routes and send monthly

reports to the Government. This permission sought by the Director of the State Transport Department for nationalisation of the routes falling under

the policy decision of the Government without prior approval of the Government was agreed to by the Government and the Director was asked to

take action accordingly. In pursuance of this authorisation the Director has taken action and published the scheme. It is not claimed that the draft

Schemes as finalised for publication were submitted to the Minister or Secretary of the concerned department for approval before publication u/s

68-C. The impugned notification, the preamble of which has already been set out, does refer to the formation of the requisite opinion by the State

Transport undertaking. It is in the form prescribed. The notification is issued by the Director, who it is stated is the chief executive officer of the

undertaking. The questions that fall for decision on these facts are : (i) Whether as contended for the respondents the Director of the State

Transport Department was himself competent to validly formulate and publish the scheme u/s 68-C and whether it was unnecessary at the stage of

initiation of the scheme to refer to the Minister or the Government; and (ii) if the Director by himself has not the legal authority to formulate and

publish the scheme, whether the scheme published can be considered valid as one duly authorised by the Government by delegation or otherwise.

A point has been taken for the petitioners that the Minister for Works who has endorsed the proposal for action being taken by the Director in

the matter of nationalisation of the routes in question without prior administrative sanction of the Government, is not the appropriate Minister. It is

stated that it is the Minister to whom the subject, Motor Vehicles Act, has been allotted under the rules of business made by the Governor of

Madras under Article 166 (3) of the Constitution who has to take the decision under the Act. A distinction is sought to be made between the

subject Nationalised Transport and the subject Motor Vehicles Act. The Secretary to the Government of Madras, Industries, Labour and Housing

Department has categorically stated in his counter affidavit, dated 7th November, 1967 that the Minister in charge of Works is the concerned

Minister who deals with transport including Motor Vehicles Act and nationalised transport. Having heard both Counsel on this point, we accept his

statement that it is the concerned Minister who made the endorsement. Whether the endorsement is sufficient to clothe the Director of the State

Transport Department with power to formulate the scheme u/s 68-C is quite a different matter.

There has been no argument before us that the formation of the requisite opinion u/s 68-C is not a condition precedent for a valid formulation

and publication of the scheme. There can be no dispute that the opinion required is the subjective opinion of the undertaking, for that is the section.

The question is, who has the legal authority to form the opinion for the undertaking''--is it Thiru Venkataraman, the Director or the State

Government? The preamble to the published scheme refers to the existence of the opinion in the undertaking and factually the opinion in respect of

the published scheme was that of the Director only. If the Director as not the appropriate authority to firm the opinion, the proposal would lack

legal competency and further steps thereunder would be wholly incompetent and without jurisdiction. A reading of Chapter IV-A would show that

the undertaking before propounding the scheme determines on the scheme on objective criteria. On a duly published scheme u/s 68-C objections

are invited from persons affected by the scheme. A judicial approach to the consideration of the scheme in the light of the objections is provided

u/s 68-D and the affected parties could lead evidence and make their submissions and it is that scheme ^proposed which ultimately on approval

after the enquiry u/s 68-D with modifications, if any, that is finalised? A finalised scheme could confer a monopoly on the State undertaking to the

exclusion, complete or partial of private operators. For assuming that monopoly and driving out private operators from the field Chapter IV-A

postulates certain conditions. To keep the undertaking within ""bounds and provide against arbitrary action an effective machinery is set up in

Chapter IV-A. In that context it is extremely important that every decisive step in the process has to be in strict conformity with law.

As we have stated at the outset, our learned brother Kailasam, J., has taken the view that the impugned notification is in accordance with the

provision of Section 68-C. It looks to us that the matter is covered by the authority of the Supreme Court in Kalyan Singh''s case (1963) 1 S.C.J.

50 : AIR 1962. S.C. 1183, for a decision the other way and the question cannot be considered res integra. The learned Judge also refers to the

decision of the Supreme Court but finds support there for his view. The question, there for, calls for careful consideration. Machinery or

nationalisation of transport services is provided or under Chapter IV-A of the Motor Vehicles Act, 1939. Section 133-A? enables a State

Government, for the purpose of carrying into effect the provisions of the Act, to establish a motor vehicles department and appoint as officers

thereof such persons as it thinks fit. Schemes for road transport service by States popularly referred to as nationalisation of road transport service

are prepared and published u/s 68-C. Section 68-D provides for finalisation of the scheme after bearing objections. We may here set out both

Section 68-C and 68-D.

68-C. Where any State Transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-

ordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in

relation to any area or route or portion thereof should be run and operated by the State transport undertaking whether to the exclusion, complete

or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services

proposed to be rendered the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall

cause every such scheme to be published in the official gazette and also in such other manner as the State Government may direct.

68-D. (1) Any person affected by the scheme published u/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

representations 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 the previous approval of the Central Government.

u/s 68-C the State Transport Undertaking forms the opinion that for the purpose of providing an efficient, adequate, economical and properly

co-ordinate road transport service it is necessary in the public interest that road transport services in general or any particular class of such service

in relation to any area or route or portion thereof should be taken by the State Transport Undertaking, whether to the exclusion, complete or

partial, of other persons or otherwise and then prepares a scheme giving particulars of the nature of the services proposed to be rendered, the area

or route proposed to be covered and such other particulars respecting thereto as provided in the rules. The undertaking thereupon causes the

scheme to be published in the official gazette and also in such other manner as the State Government may direct. Under the first part of the section

the opinion is formed that it is necessary in the public interest that the road transport services should be run and operated by the undertaking fur the

purpose of providing an efficient, adequate, economical and properly co-ordinated service. Under the second part of the section the scheme is

prepared giving particulars. Then the prepared scheme is cause to be published. Then the State Government comes on the scene as a supervisory

authority and functions as a quasi judicial tribunal, between the undertaking and the affected parties. Section 68-D authorises the State Government

to receive objections to the scheme and after considering the objections giving an opportunity to the objectors and the representative of the

undertaking to represent their respective case, to approve or modify the scheme. The State Government may also reject the scheme proposed. A

scheme which is approved or modified is published in the official gazette as approved scheme and thereupon it becomes final. An inter-State route

does not become an approved scheme unless it has been published in the official gazette with the previous approval of the Central Government.

Section 68-C and Section 68-D bring out prominently that the Act contemplates the State Transport Undertaking as a distinct entity by itself, it is

made a statutory authority. But a reference to the definition of the expression State transport undertaking would show that it is in reality a sheath

put on a transport enterprise run by the State or under the control of the State for the purpose of chapter IV-A. The State Transport Undertaking

gets defined by Section 68-A (b) for the purpose of Chapter IV-A, thus:

State Transport Undertaking means any undertaking providing road transport service, where such undertaking is carried on by:

(i) the Central Government or a State Government;

(ii) any Road Transport Corporation established u/s 3 of the Road Transport Corporations Act, 1950;

(iii) the Delhi Road Transport Authority established u/s 3 of the Delhi Road Transport Authority Act, 1950;

(iv) any municipality or any corporation or company owned or controlled by the State Government.

The word undertaking ordinarily means any business or project undertaken, that is, an enterprise. When a State Government or the Central

Government carries on Road Transport Service, it would be a State Transport Undertaking for the purpose of Chapter IV-A, that is a transport

enterprise by the State or Central Government is a State transport undertaking. An autonomous Road Transport Corporation formed u/s 3 of the

Road Transport Corporations Act, 1950, or any corporation or company controlled by the State Government or any municipality when running

transport service would also be a State Transport Undertaking. It follows from this definition that the Madras State Transport department, a

department of the State Government, of which Thiru T.V. Venkataraman is the Director and stated to be the Chief Executive Officer is a State

Transport Undertaking for the purpose of Chapter IV-A.

The question as to who may initiate the scheme where the undertaking is a department of the Government came up for consideration before the

Supreme Court in Kalyan Singh''s case (1963) 1 S.C.J. 50; A.I.R.1962 S.C. 1183, above referred to. In that case the scheme u/s 68-C

proposing nationalisation was issued by the State Government. Objections to the scheme u/s 68-D were heard by the Joint Secretary, Judicial

department of the Government, and finally approved by him, and the approved scheme notified in the Gazette. The contention taken in that case by

the, affected transport operators was that it was the undertaking that had to form the requisite opinion and prepare the scheme for nationalisation

and publish it in the prescribed manner, and that as the State Government initiated the scheme, it was not validly made. For the State it was

contended that a transport undertaking run by a State Government was a State Transport Undertaking and that, therefore, the scheme initiated by

the State Government which ran the State undertaking was a scheme initiated by the State undertaking. This contention was accepted by the

Supreme Court. One of the main points urged by the private operators in that case was that the underlying scheme of the Act which provided for

objections by the aggrieved parties before the State Government, hearing of both the private operators and the undertaking and approving or

modifying the scheme, could not be worked out unless a clear distinction and well marked dichotomy was observed between the State Transport

Undertaking and the State Government. The Supreme Court, after pointing out that in the case of an undertaking run by a State Government there

was some overlapping of functions, observed that the anomalous position may in practice be avoided by the State Government creating a

department to be in charge of the undertaking and hearing objections and approving or modifying the scheme in a manner without violating the

principles of natural justice. On the question as to whether the State Government can form the opinion the position was formulated thus:

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 State 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 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....

If a State directly runs an undertaking, it can only be through a department. In law, there cannot be any difference between an undertaking run by a

department of a State Government and that run by the State Government. In either case the undertaking is run by the State and that undertaking is

a State Transport Undertaking within the meaning of Section 68-C of the Act.

The opinion mast necessarily be formed by somebody to whom under the rules of business, the conduct of the business is entrusted and that

opinion, in law, will be the opinion of the State Government. It is stated in the counter-affidavit that all the concerned officials in the Department of

Transport considered the draft scheme and the said scheme was finally approved by the secretary of the Transport Department before the

notification was issued. It is not denied that the secretary of the said department had power under the rules of business to act for the State

Government in that behalf. We, therefore, hold that in the present case the opinion was formed by the State Transport Undertaking within the

meaning of Section 68-C of the Act, and that there was nothing illegal in the manner of initiation of the said scheme

(italics is ours)

To us it appears after this specific and positive pronouncement of the Supreme Court that the opinion of a State Transport Undertaking must

necessarily be that of the State Government, which funs it; the question raised in the present cases does not call for further debate. But our learned

brother Kailasam, J., considers that this pronouncement would not apply to the instant case and distinguishes that case observing:

In this case the notification is u/s 68-C by the State Transport Undertaking and the difficulty that arose in the case before the Supreme Court by

the issue of the notification u/s 68-C by the State Government does not arise.

Before the learned Judges, the respondents had not then filed their counter-affidavits and we do not know the exact stand taken by them at that

interlocutory stage. The. learned Judge proceeds to observe:

In repelling the contention that the opinion of the State Government is not the opinion of the State Transport Undertaking, the Court observed that

the opinion of the State Government can be legitimately said to be that of the State Transport Undertaking. This decision in my view, does not

support the contention of the learned Counsel for the petitioner. On the other hand, it supports the stand of the Government that the Act envisages

State Transport Undertaking which can be a department of the State Government as different from the State Government.

In our view, the distinction misses a vital point. When their Lordships of the Supreme Court observed that the opinion of the State Transport

Undertaking must necessarily be that of the Government which ran it, they were enunciating a juristic principle that in the State Government was

located the power and authority to form the requisite opinion for the statutory entity, the State Transport Undertaking. To say that the State

Government must form the Opinion or make the decision wherever an opinion or decision of the State Transport Undertaking is called for is not to

ignore that the Act contemplates two distinct entities--the State Transport Undertaking and the State Government. It is localising the decision

making faculty of the undertaking, speaking figuritively, legally locating the brain or mind of the undertaking. Where a State directly runs an

undertaking, as pointed out by the Supreme Court, it can only be through a department of the Government or a particular officer. The overlapping

of functions on the one hand and the necessity for preserving the principles of natural justice on the other when the State Government functions as

quasi-judicial authority u/s 68-D between the undertaking and the private operators, cannot affect the legal concept underlying the principle

enunciated by the Supreme Court that the opinion of the statutorily defined undertaking must necessarily be that of the State Government which

runs the undertaking. The anomaly of the State Government being the proposer of the scheme and the judge of its validity, it has been noticed by

the Supreme Court in several cases, could be avoided in practice by suitable provisions in the exercise of the dual functions of the Government.

This aspect will become clear if we examine the position with reference to other Transport Undertakings that fall within the definition of State

transport undertaking in Section 68-A (b)--Say a transport undertaking by a Road Transport Corporation established u/s 3 of the Road Transport

Corporations Act, 1950, or by a municipality or a corporation or company owned or controlled by the State Government. The expression State

transport undertaking is the nomenclature given under Chapter IV-A to an enterprise defined therein. If an autonomous corporation or company

owned or controlled by the State Government or a municipality runs a Transport Service, it would be a State Transport undertaking. When such

State Transport Undertaking has to form an opinion or take a decision the opinion has necessarily to be formed or decision necessarily taken by

the corporation, company or municipality as the case may be. Though the opinion or decision is taken by the municipality or corporation or

company and there is none else to take it, it will be the opinion of the State Transport undertaking for the purpose of Chapter IV-A. The position

cannot be different if the enterprise is of the State Government. So when the opinion is formed or decision taken by the State Government, it will

be the opinion or decision of the State Transport Undertaking for the purpose of Chapter IV-A.

Chapter IV-A does not give the undertaking a constitution of its own locating the seat of the power to take a decision or form an opinion. The

body running the service, whether it is a company, corporation, municipality or the Government, will have to form its opinion according to the rules

governing its constitution. If it is a company, its decision or opinion is formed according to the articles of the company. A Road Transport

Corporation established under sections of the Road Transport Corporation Act, 1950, is a body corporate having perpetual succession and a

common seal. It has its own constitution and its opinion or decision must be formed according to the provisions of the Act,. A municipality''s

decision is, taken according to the provisions of the Act governing the municipality. When so formed, for the purpose of Section 68-C, the opinion

or decision of any of these bodies would be that of the State Transport Undertaking which would be under the definition in Section 68-A. Even so

when a State Government maintains a department for providing Road Transport Service, even though the State Department would fall within the

definition of State Transport Undertaking, the legal persons of the department is the State Government itself and its acts and decisions have to

conform to the business rules of the Government. The Motor Vehicles Act under Chapter IV-A, when personifying the several transport

undertakings referred to in Section 68-A (b) as distinct statutory entities under the style State transport undertaking, has not disturbed the situs of

its opinion forming or decision taking organ ; it remains where it was. Impersonal bodies can function only through the machinery and in the manner

prescribed by their law and constitution.

In Dosa Satyanarayanamurty etc. Vs. The Andhra Pradesh State Road Transport Corporation, , where a scheme was published by the Chief

Executive Officer of the Andhra Pradesh State Road Transport Corporation, a body corporate having perpetual succession and common seal, it is

observed by the Supreme Court:

The Chief Executive Officer has no power under the Act to frame a scheme. Section 68-C empowers only the State Transport Undertaking to

prepare a scheme and cause every such scheme to be published in the official Gazette and also in such other manner as the State Government may

direct. The scheme, therefore need not be directly published by the Corporation, but may cause it to be published in the official Gazette. The Act

of publishing in the official Gazette is a ministerial act. It does not involve any exercise of discretion. It is only a mechanical one to be carried out in

the course of day to day administration. So understood, there cannot be any difficulty in holding that it was purely a ministerial act which the Chief

Executive Officer by reason of the aforesaid resolution can discharge u/s 12 (c) of the Road Transport Corporations Act. It must be presumed for

the purpose of this case that the Corporation decided the terms of the proposed schemes and the said decision must have been duly authenticated

by the Chairman or any other member authorised by the Corporation in this behalf and the Chief Executive Officer did nothing more than publish

the said scheme in exercise of its administrative functions.

Only on the presumption that the scheme had been prepared in the manner authored for the corporation, the publication of the scheme by the Chief

Executive Officer was upheld. Section 68-C empowers the State Transport Undertaking to cause the scheme to be published in the official

Gazette. The act of publication was considered to be a purely ministerial Act. But the Chief Executive Officer, it is said, could not himself frame a

scheme. Only the corporation could frame its scheme but that can only be in accordance with its constitution.

Referring to the same C.S. Rowjee and Others Vs. Andhra Pradesh State Road Transport Corporation, , the Supreme Court observed:

Under Section 68-C of the Motor Vehicles Act it is the Corporation which is the State Transport Undertaking which has to form the opinion

whether '' for the purpose of providing an efficient, adequate, economical and properly co-ordinated Road Transport Service it is necessary in the

public interest whether the services should be run and operated by the State Transport Undertaking''. Secondly, it is the Corporation that has to be

satisfied that such services should be in public interests be provided for any area or route.

Mutatis mutandis where the transport undertaking is caried on by the State Government it is the State Government which is the State Transport

Undertaking which has to form the requisite opinion u/s 68-C.

For the petitioners reference was made also to Kashi Prasad Gupta Vs. Regional Transport Authority, Gorakhpur and Others, . It is needless

to refer in detail to this decision after the exposition of the law by the Supreme Court in Kalyan Singh''s case (1963) 1 S.C.J. 50 : AIR 1962 S.C.

1183. There also the notifications u/s 68-C referred to the requisite opinion being that of the State Government. We may, however, refer to the

following passage in Kashi Prasad Gupta Vs. Regional Transport Authority, Gorakhpur and Others, :

It is not anybody''s allegation that any independent authority, in the shape of a corporation, has been established by the State Government u/s 3 of

the Road Transport Corporation Act, 1950. There is no company or corporation also operating these services which can be said to be controlled

or owned by the State Government. The Transport Department of the Government, is, on the other hand, providing and operating these services.

Even so here the State transport department is not an autonomous body with power to make decision of its own ; it remains a department of the

Government. It is the State Government that runs the undertaking, though for administrative purpose there is a separate department in charge of the

service. In Jaw the department can junction only as Government, and its business is the business of the Government. It is this feature that makes all

the difference and though the presence of this feature necessitates making due provision for the State Government to function u/s 68-D as a quasi-

judicial authority when the scheme comes up for consideration and approval, under the Act as it stands, the initiation of the scheme has to be by

the Government, that is, as the State Government running the undertaking.

The learned Advocate-General drew our attention to certain passages in Gullapalli Nageswara Rao and Others Vs. Andhra Pradesh State

Road Transport Corporation and Another, . It is stated therein:

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 the legal competence to initiate the scheme.

Proceeding further the question was posed whether the State transport undertaking formed the opinion before preparing the scheme and causing it

(to be) published in the official Gazette. That scheme which was published was signed by Guru Prasad, General Manager, State Transport

Undertaking, Andhra Pradesh Road Transport. The preamble to the scheme incorporated the first part of Section 68-C, that is, a scheme was

proposed for the purpose of providing an efficient, adequate, etc. transport service, in the public interest. The word opinion was omitted. The

Supreme Court observed:

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 Undertaking. 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 question in the present case is not as to whether an opinion has been formed, but whether the appropriate authority has formed the 0 pinion

and initiated the scheme. The objection here taken is not one of form but of substance. No doubt a contention was raised before the Supreme

Court in that case that the general manager for the State Transport Undertaking had no authority to do so on its behalf. The Supreme Court

observed that it was a question of fact and should have been raised specifically in the petition. It was not overruled as a highly technical objection

not affecting the validity of the initiation. It was stated:

It was not the case of the petitioners that even if he had been appointed as Manager of the Andhra State Transport Undertaking, he would have no

authority to frame and publish a scheme on behalf of that undertaking. The petitioners cannot at this stage be allowed to challenge his authority to

do so, when they did not specifically raise this point in their petitions.

Another case relied upon for the respondents K. Gopala Krishnayya and Others Vs. State of Andhra Pradesh and Another, , does not help the

respondent and further it is of doubtful authority. The following observations therein, in our view, go against the current of authority in that regard:

Here, no such considerations pertain to the initiation of a scheme u/s 68-C. As the opinion to be formed is a private one, it is not a condition

precedent to the exercise of its monopoly.

Nor does the case Samarth Transport Co. Private Ltd. Vs. Y.B. Chavan and Others, , advance the defence. In that case it was held that the

undertaking admittedly belonged to the Government and the activity of the Government in carrying on the undertaking was under the administration

of the department for Transport. The question was whether the Chief Minister could be regarded as a person who had proposed the scheme of

Road Transport Service. It had been provided that it was the Chief Minister who had to hear and decided objections to the scheme. It was held

that the Chief Minister was not the head of the transport undertaking and could not be regarded as a person who proposed the scheme of Road

Transport Service. We do not have details as to the constitution of the department. Apart from this fact, the question in the form now appearing

before us was not under consideration in that case. In fact for the Transport Service it was stated that the Government of Bombay themselves were

not the State Transport undertaking, and that the statuory authority had its board of management consisting of both official and non-official

members and also a General Manager authorised and empowered to carry out its functions and duties. The other citation for the respondents on

this part of the case Birajmohan Das Gupta v. The State of Orissa (1962) 1 S C R. (Supp.) 681, is of no help. In that case a notification u/s 68-C

was issued by the Transport Controller in charge of the State Transport Undertaking. An argument was raised that the notification did not show

that it was the State Transport Undertaking which was satisfied that it was necessary to take action under the section, as the notification referred

only to the opinion and satisfaction of the Transport Controller. The point was not taken in the petitions and the Supreme Court did not examine

the position. Their Lordships of the Supreme Court said that it was a question of fact and should have been specifically pleaded in the petitions so

that the State may have been able to make a reply, and that in the absence of any averment on the question of fact they were not prepared to allow

the petitioners to raise the point in arguments.

In this state of authorities, we feel bound by the decision of the Supreme Court in Kalyan Singh''s case (1963) 1 S.C.J. 58 : AIR 1962 S.C.

1183. We cannot distinguish that case as arising out of a case where the State Government had formed its opinion and that opinion was

challenged. To distinguish in that manner would be to make a distinction without any difference. The power to form an opinion or take a decision in

a given matter cannot normally vest at the same time in two different entities. Clearly in this case the State Government could have formed its

opinion and framed a scheme differing in material particulars from the scheme now proposed. The validity of such a scheme, if published by the

Government, has to be conceded in view of Kalyan Singh''s case (1963) 1 S.C.J. 50 ; AIR 1962 S.C. 1183. If the contention of the respondents

is to be accepted, there can be two rival schemes, one by the Director if the State Transport Department and the other by the Government

prepared and published according to the rules governing Governmental business. Which of these schemes has to be construed as the scheme

prepared in accordance with law? The answer has to be that in matter of this kind there cannot be two bodies both competent to initiate the same

matter. We are not considering the probability of such conflict arising. We are only considering the utter untenability of the claim that independent

of the Government the head of the State Transport Department as now constituted can himself validly frame and publish a scheme.

We shall next consider whether the scheme prepared and published by the Director of the State Transport Department as the head and Chief

Executive Officer of the department could be considered to be the scheme of Government. The Government carries on its business and functions

according to the Madras Government Business Rules and Secretariat Instructions. Article 154 of the Constitution vests executive power of the

State in the Governor, and it shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution.

Article 154 (2) provides that such vesting does not prevent Parliament or the Legislature of the State from conferring, by law functions on any

authority subordinate to the Governor. Section 3 (60) of the General Clauses Act which is applicable in the interpretation of the Constitution by

virtue of Article 367 (1), defines a State Government as the Governor in a State. While Article 166 (1) provides that all executive action of the

Government of a State shall be expressed to be taken in the name of the Governor, Clause (3) of the Article provides that the. Governor shall

make rules for the more convenient transaction of the business of the Government of the State and for the allocation among the Ministers of the

said business in so far as it is not business with respect to which the Governor is by or under the Constitution required to act in his discretion. The

statutory functions of the State Government would also be functions of the Governor for allocation of business under Article 166 (3), The Madras

Government Business Rules and Secretariat Instructions framed in exercise of the powers conferred by Clauses (2) and (3) of Article 166 of the

Constitution defines, Secretary to mean a Secretary to the Government of the State and includes an Additional Secretary, a Joint Secretary and a

Deputy Secretary to the Government of the State, Rule 4 dealing with allocation and disposal of business provides that the business of the

Government shall be transacted in the departments specified in the first schedule and shall be classified and distributed between those departments

as laid down therein. Rule 5 provides for the Governor on the advice of the Chief Minister, to allot the business of the Government among the

Ministers by assigning one or more departments to the charge of a Minister. Under Rule 6, each department of the Secretariat shall consist of a

Secretary to the Government, who shall be the official head of the department, and of such other officers and servants subordinate to him as the

State Government may determine. Except the Legislative Assembly and the Legislative Council more than one department may be placed in charge

of the same Secretary and the work of a department other than the Legislative Assembly and the Legislative Council departments may be divided

between two or more Secretaries. Under Rule 7 the Council of Ministers constituted under Article 166 (3) is held collectively responsible for all

executive orders issued in the name of the Governor in accordance with the rules, whether such orders are authorised by an individual Minister on

a matter appertaining to his portfolio or as a result of discussion at a meeting of the Council or otherwise. Under Rule 9, without prejudice to the

provisions of Rule 7, the Minister in charge of a department shall be primarily responsible for the disposal of the business appertaining to that

department. Coming to the departmental disposal of business, it is necessary to refer to Rules 21 and 22 in particular. Under Rule 21 except as

otherwise provided by any other rule, cases shall ordinarily be disposed of by or under the authority of the Minister in charge who may by means

of standing orders give such directions as he thinks fit for the disposal of cases in the department. Copies of such standing orders should be sent to

the Governor and the Chief Minister. Rule 22 provides that each Minister shall by means of standing orders arrange with the Secretary of the

department what matters or classes of matters are to be brought to his personal notice. Copies of such standing orders shall be sent to the

Governor and the Chief Minister. As we have accepted the affidavit of the Secretary to the Government of Madras, Industries, Labour and

Housing Department, that business, relating to the Motor Vehicles Act and Nationalised Bus Transport are attended to by the Minister for works

under whom he is working, it is unnecessary to refer to the allocation of business among the Ministers.

Now the Governor in whom the executive business of the State vests, had made rules enabling the Minister in charge of a particular

department to dispose of the cases before him and also authorise him by means of standing orders to give such orders as he thinks fit for the

disposal of the cases in the department. The respondents, in spite of their attention being drawn to the necessity for standing orders for disposal of

cases in the department, have not produced any standing orders. We may also point out that it is not claimed that the Director ex-officio or

otherwise has the status of the Secretary of the department. Our attention has not also been drawn to any rules of business or standing orders

under which the Director of the State Transport Department has been authorised to deal with this matter. At the moment we are not on the

question of the validity, if any, of such rule. The Governor exercises the executive power of the State only through his Ministers and other Officers

subordinate to him. But the subordinate officers may act and discharge the functions of the Government only on being duly authorised in

accordance with the rules of business framed under Article 166 of the Constitution. Of course, the functions may be conferred by law on any

subordinate authority under Article 154 (2) (b). Legislative power in relation to the matter now under consideration being available under Entry 35-

-mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied, and Entry 21--commercial and industrial

monopolies, combines and trusts, in List III. Neither the statutory authority under Article 154 (2) (b) nor the power under the business rules

framed under Article 166 (3) could be strictly called delegated powers. It was having regard to this aspect of the matter that we asked the

Advocate-General to find out whether in the constitution of the transport department of the State the requisite authority for the Director to act u/s

68-G could be found. No materials have been placed before us for an inference in favour of the department. The respondents do not base the

authority of the Director to initiate the scheme on the Rules of Business of the Government or on any legislation under Article 154 (2) (b). In his

counter affidavits, dated 20th October, and 7th November, 1967 the Secretary to the Government only states that as head of the department the

Director exercises certain powers. It is not stated that he has been specifically invested with the powers required for forming an opinion and

framing a scheme u/s 68-G. The mere fact that he is the chief executive officer of the transport department of the Government, does not enable him

to act as if he were the Government. That is not the way that Government business is done in a democratic State.

Referring to the proceedings prior to the actual publication of the scheme, the learned Advocate-General submitted that the notification of the

Government, dated 17th June, 1967, G.O.Ms. No. 2007 (Transport) could itself be considered as the expression of the requisite opinion of the

Government. This notification no doubt proceeds as by the order of the Governor and is subscribed by the Secretary to the Government of the

concerned department. But this notification by itself can, by no stretch of reasoning, be regarded as publication of the scheme in the official Gazette

contemplated u/s 68-G. First, it is not-and it cannot be claimed, that it itself is the scheme. The learned Advocate-General would submit that it is

the core of the scheme and the scheme published has only worked out the details of the scheme of notionalisation suggested in the said

Government order. But in his affidavit, dated 7th November, 1967, the Director avers with reference to G.O. Ms. No. 2007 as follows:

G.O.Ms. No. 2007 was used as annexure in order to put it on record that the Government had issued the necessary Government Order which

only stated a policy decision, which policy decision was enough guidance. This again was filed into Court only in order to show that the

Government has taken a decision to nationalise the routes falling under certain categories.

A policy decision broadly setting out the policy in regard to nationalisation of transport service is not the same thing as the precedent opinion called

for under section-68-C for patting a draft scheme. This Government order varied a prior policy decision. To accede to the argument here

considered and hold that setting out of guidelines in broad outline would be sufficient compliance, will be to permit inroads on the safety provided

for private operators u/s 68-C. Section ""68-C is not concerned with the general policy decision for nationalisation. Nationalisation scheme has to

be implemented and initiated by the undertaking when it is of opinion that for the purpose of providing an efficient adequate economical and

property co-ordinated Road Transport Service it is necessary in the pubic interest that the Road Transport Services in general or any particular

class of such service in relation to any area or route or portion thereof should be run and operated by the under-taking. It has. further to consider

then whether the service should be to the exclusion, complete or partial of other persons or otherwise. Rule 294-C framed by the Government u/s

68- (I) providing for rules being made by the State Government for the purpose of carrying into effect the provisions of Chapter IV-A, requires

that every scheme for Road Transport Service and every scheme proposing notification of an approved scheme prepared by the State Transport

Undertaking shall be published by the State Transport Undertaking in a particular form. Schedule I of the form contains 18 columns to be

considered. Due compliance with the rules and the forms are statutory requirements. It is manifest that these particulars are required to be set out in

the proposed scheme, so that the transport operators running vehicles on the routes might know whether they would be affected by the scheme

and if they have grounds, may prefer objections to the scheme within the time provided.

In Dosa Satyanarayanamurty etc. Vs. The Andhra Pradesh State Road Transport Corporation, , the validity of a nationalisation scheme was

attacked on the ground of bias. It was inter alia contended that a sub-committee consisting of Ministers, Secretaries and officers of the connected

department and presided over by the Minister in charge of transport decided that under the scheme of nationalisation of bus service the State

Government would take over the bus service in West Godavari and Guntur districts, and that, therefore, the Minister in charge of the portfolio

having pre-determined the issue disqualified himself to decide the issue between the State transport undertaking and the private operators. The

enquiry u/s 68-D in that case was held! by the Minister in charge of the portfolio, the transport corporation being represented by its chief executive

officer and its legal advisers. After pointing out that the State Government in deciding the dispute between the undertaking and the operators of

private buses was only discharging its statutory function, and coming to the question of bias on the part of the Minister, it was said by the Supreme

Court:

The fact that he presided over the sub-committee constituted to implement the scheme of nationalisation of bus services in the West Godawari

District does not in itself establish any such bias....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 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 pre-determination of the issue ; it can only mean that the policy would be

implemented subject to the provisions of the Act.

It is clear from these observations of the Supreme Court that a mere policy decision cannot be considered to be the formation of the requsite

opinion u/s 68-C If it had been the determination required u/s 68-C, the Minister would have been disqualified.

The constitution of the committee under G.O. No. 2008 and the subsequent proceedings leading to the authorisation of the Director to

nationalise the routes without prior approval of the Government nowhere fall within the scheme of allocation or authorisation of Government

business considered above. True it would be impracticable to expect the Minister in person to attend to the various details or ''even the Secretary

of the department himself to examine the necessary statistics and ''reports and formulate the draft scheme. In a modern welfare State with its

multifarious activities, a Minister cannot be expected to discharge all his portfolio work personally. Such a requisite would bring public work to a

standstill. He may have to depend on his subordinates to a large extent, but disposition of work must be according to law. In this case it might have

been sufficient if the draft scheme worked out in detail had been before publication submitted to the Government for its approval and the

Government had approved the scheme and authorised its publication. The committee constituted under the aforesaid Government order was asked

to submit a report within a fortnight. We do not know the nature of the report ''that was submitted. All that we have on record is that the Director

suggested that he may have, so to say a carte blanche, to nationalise all the routes which belong to the specified categories permits of which

expired in the course of the financial year 1967-68. He wanted to be excused from submitting individual proposals in respect of the routes for the

administrative approval of the Government. It does not appear from the record that details of the scheme"" promulgated were brought even to the

notice of the committee. The only statistics which the Director appears to have submitted to the committee, as seen from the record, is a list of

routes whose permits expired in the course of the year 1967-68., with mileage, number of buses and dates of expiry. ''The various particulars that

had to be filled or considered in preparing a scheme in -terms of the form prescribed by the rules must in the circumstances all have been the

subject of the deliberations of the Director. The Secretary got the Minister''s endorsement only to the proposal of the Director that he may be

permitted to nationalise the scheme in respect of the routes covered by G.O. No. 2007 without the prior administrative sanction of the

Government. The question is whether this authority could amount to a valid delegation of the power to form the requisite opinion and frame the

scheme.

Mr. M.K. Nambiyar, learned Counsel for the petitioners, submits that when by statute a power is conferred on an authority to form a

subjective opinion in a matter, the power must be exercised by that authority and no other. It is said that there can be no valid delegation of such

power in the absence of express statutory authority. Our attention is drawn to Wade''s Administrative Law, where it is stated at page 51:

More obvious cases of illegal delegation Occur where the power is conferred upon some particular body, and without any statutory authority they

allow some officer of employee to exercise it.

As an authority for this proposition Allingham v. Ministry of Agriculture and Fisheries (1948) 1 All E.R. 780, : is given, where it was held that a

statutory power delegated by a Minister to a local agricultural executive committee could not be delegated to an officer responsible to that

committee. Lord Goddard C.J., said in that case at page 781:

In this case, it seems to me that the committee left to some one the duty of deciding that which the regulation, which has the force of a statute,

requires them to decide for themselves.

The learned Author states that the rule must always apply unless it is expressly excluded, or unless, on a true construction, the delegate is within the

statutory description of the persons authorised to wield power. Our attention is also drawn to the following passage in Garner''s Administrative

Law, at page 112:

The Courts will also insist that a discretion entrusted by Parliament to a particular administrative agency is exercised by that agency itself, unless the

enabling statute has also expressly conferred on the agency a power to delegate the right to a decision. Where a power to delegate exists any

exercise of that power by the delegating authority and any exercise of the right to decide by the delegate, must be exercised strictly in accordance

with the terms of the statute.

The learned author summing up the cases where the maxim delegatus non potest delegare applies, states that the maxim applies in short to all

persons who are empowered by a statute to do anything and the prohibition on delegation of a discretionary power even applies in case where the

delegating authority simply agrees to abide by some other persons'' decision. The following passage in the judgment of the Supreme Court in

Commissioner of Police, Bombay Vs. Gordhandas Bhanji, , is also relied on for the petitioners:

It is clear to us from a perusal of these rules that the only person vested with authority to grant or refuse a licence for the erection of a building to

be used for the purpose of public amusement is the Commissioner of Police. It is also clear that under Rule 250 he has been vested with the

absolute discretion at any time to cancel or suspend any licence which has been granted under the rules. But the power to do so is vested in him

and not in the State Government and can only be exercised by him at his discretion. No other person or authority can do it.

Learned Counsel contends that it is left to the discretion of the Government to nationalise routes or not, that it is a power statutorily conferred, to

be exercised on the subjective opinion of the Government, and that if that power is to be exercised by another or there is to be delegation of that

power it can only be in accordance with the provisions of distribution of functions of the Government or under authority of law. Chapter IV-A

does not empower any delegation. The director of the Madras State Transport could be vested with the power u/s 68-C by statute but such

statute is not there. Therefore, it is said the proposed scheme is void and cannot be taken up for consideration u/s 68-D. In the context of the

submissions the decision of the judicial Committee in King Emperor v. Sibnath Banerji (1945) F.C.R. 195 : (1945) F.L.J. 222 : (1945) 2 M.L.J.

325 on appeal from the Federal Court may also be usefully referred to. That was a case where in relation to a statutory power of delegation, the

provisions of Sections 49 and 59 of the Government of India Act, 1935, which were incidentical terms with the provisions of Article 166 of the

Constitution which we are considering, came up for consideration. Section 2 (5) of the Defence of India Act, 1939 enabled the Provincial

Government to delegate any power conferred on it by rules under the Act. Under Rule 26, the Provincial Government, if it was satisfied with

respect to any particular person that with a view to prevent him from acting in any manner prejudicial to the defence of India, public safety, etc., it

was necessary to do so, might make an order inter alia directing that he be detained. The specific power of delegation was not exercised in the

case under consideration; but the Governor as the Provincial Government was not personally satisfied as to the matters set out in Rule 26.

Referring to Rule 26, the majority of the Judges of the Federal Court held that the Governor must be personally satisfied as to the matters therein

set out, and that in view of the admission by the Crown that in none of the cases before them had the Governor himself considered the case, the

orders for detention were not in confermity with the rule. But the learned Chief Justice disagreed and held that the power of delegation was

supplementary and afforded no ground for excluding the ordinary methods by which the provincial Government''s executive business as authorised

to be carried on by the Government of India Act. The Privy Council accepted the opinion of the learned Chief Justice. After referring to the rules

of business framed by the Governor of Bengal u/s 59 (3) corresponding to Article 166 (3) of the Constitution and the broad scope of the

expression executive action, the Judicial Committee observed at page 221:

It is for the same reason that their Lordships are unable to accept the respondent''s contention, also agreed to by the majority Judges in the Federal

Court, that the provision of Sub-section (5) of Section 2, of the Defence of India Act provides the only means by which the Governor can relieve

himself of a strictly personal function. Their Lordships would also add, on this contention, that sub-section 5 of sub-section 2 provides a means of

delegation in the strict sense of the word, namely, a transfer of the power or duty to the officer or authority defined in the sub-section, with a

corresponding divestiture of the Governor of any responsibility in the matter, whereas u/s 49, Sub-section (1), of the Act of 1935 the Governor

remains responsible for the action of his subordinates taken in his name.

This decision is clear authority for the position that functions or duties vested in the State Government by a statute may be exercised by

subordinates, where there is statutory power of delegation or there has been due authorisation under the rules of business framed under Article 166

(3). The Governor may allocate such statutory functions including matters to be dealt with under the subjective satisfaction of the Government to

the Ministers by making rules under Article 166 (3). The. Minister in charge may, under standing orders provide for disposal of the cases in his

department. When there is no provision under law for delegation and the power is vested in the Government, the Government business rules have

to be followed for the due exercise of the powers. Subordinate officers may be authorised only in accordance with the rules of business framed

under Article 166 and not otherwise, authorisation by statute being another available way. In the present case admittedly the scheme finalised for

publication was not placed before the concerned Minister for his approval; nor is it claimed that a Secretary of the concerned department

empowered understanding orders accepted the scheme for publication u/s 68-C. The stand taken by the Director is that it was unnecessary at the

stage in question to refer to the Minister or to the Government, and that Article 166 of the Constitution is not germane to the issue. The contention

is that only a final decision has to be taken by the Government and that will be done later at appropriate stage. This being the stand taken by the

department and as the stand cannot be sustained, in law, it is needless to labour further on the matter. There has been a serious misconception in

the matter and in the result the conditions precedent for the initiation of the scheme are totally absent in this case. The appropriate authority had not

formed the requisite opinion before preparing the scheme; nor did the appropriate authority prepare the scheme for its valid publication. The

scheme as prepared and published lacks legal sanction behind it and the further proceedings on such a scheme, inviting objections from parties

affected and judicial enquiry thereon are futile proceedings wholly devoid of jurisdiction. It follows that the petitioners are entitled to the relief of

prohibition they have prayed for.

This does not preclude the undertaking from taking the scheme and re-publishing it, if it gets the Government''s endorsement that in the

Government''s opinion for the purpose of providing an efficient adequate, economical and properly co-ordinated Road Transport Service it is

necessary in the public interest that a scheme in the terms proposed should be put into operation. In law the initiation of the scheme should be by

the State Government which runs the undertaking for the undertaking. As at person placed the Director could only recommend to the Government

the scheme he draws up for the Government''s consideration u/s 68-C. We have not considered the objections to the scheme on the merits and on

its details. All other questions except those that we have taken up for discussion are left open. In our view, the initiation of the scheme is bad and

not in accordance with the statute. It is not a mere technical defect but goes to the root of the jurisdiction. In the Government of a welfare State

necessarily, under innumerable Acts, orders, rules and regulations in quick succession, a variety of authorities get vested with wide powers

affecting the citizen. New statutory bodies come into existence. In this complex it is normally difficult to know whether these authorities and bodies

are functioning in accordance with law or not, but indubitably it is of paramount importance that they act strictly in accordance with the powers

entrusted to them. Therefore, it is the duty of the Court to see that they do so and correct transgressions when brought to its notice.

In the result writ of prohibition will issue in the several cases directing the respondents to forbear from taking further steps pursuant to the

Gazette notification, dated 26th July, 1967 u/s 68-C in Chapter IV-A of the. Motor Vehicles Act, 1939. The writ petitions are accordingly

allowed. As, Writ Appeal No. 326 of 1967 arises out of an interlocutory order no separate orders are necessary thereon. They are dismissed as

unnecessary. Writ Appeal Nos. 329, 352 to 354. and 359 to 361 of 1967 all arising out of final orders refusing prohibition have also to be and

are, therefore, allowed. Costs of the petitioner is Writ Petition No. 2303; of 1967 only allowed.

Nationalisation Writs.

In the light of the separate judgments just delivered by us, and, on the grounds exhibited there, we direct the following disposals.

Writ Appeal No. 326 of 1967 which is strictly confined to an appeal from an order in an interlecutory proceeding before Kailasam, J., will be

dismissed as infructuous. Writ Appeal Nos. 329, 352 to 354 and 359 to 361 of 1967 will be allowed as susbtantially they involve the same relief

of the issue of a writ of prohibition sought for in the vast majority of the Writ Petitions before us.

Writ Petition Nos. 2735 and 2812 of 1967 will also be allowed along with the writs relating to prohibition, namely, Writ Petition Nos. 2303,

3063, 3064, 2780, 2785, 2786, 3038 to 3040, 3094 and 3268 of 1967, as they are for the issue of writs of certiorari substantially for quashing

the present scheme as lacking in jurisdiction.

Writ Petition Nos. 2664, 2665, 2734, 2881, 2785, 2787, 2892, 2906, 3054, 3182, 3260 and 3285 of 1967 which relates to prayers either

for the issue of writs of mandamus to direct the Regional Transport Authorities to consider and allow the applications for renewal of permits or for

temporary permits of private stage carriage operators on the routes, for the issue of writs of certiorari will be segregated and not dealt with as part

of these proceeding''s and posted before us separately for disposal.