SARASWATI DEVI v. U.P. STATE

SARASWATI DEVI & ORS. _v._ STATE OF U.P. & ORS. _November_ 4, 1980 1005 A **B** ### **c** **D** E **F** **G** **H** **,L_** {Y. V. CHANDRACHUD, C. J., P. N. BHAGWATI, V. R. KRISHNA IYER, S. MURTAZA lf'AZAL ALI AND A. D. KOSHAL, JJ.] _Motor_ _Vehicles_ _Act,_ 1959, _sections_ 68C _and_ 68D, _scope_ _of-Objections_ _involving comparison_ _of_ _the pre-existing road transport services_ _wi1h_ _those_ _prepared in a scheme are relatable to the ingredients_ _of_ _section_ 68C _and are,_ _therefore admissible under section_ 68D _of_ _the Act._ _**"t**_ _Uttar Pradesh State Transport Services (Development) Rules,_ 1958, _rules_ 5(v) _and_ 7(2)(iv), _scope_ _of-Summoning_ _of_ _witnesses and production_ _of_ _wit-_ _**11esses,**_ explain~-d. Dismissing the appeal by special leave, the Court HELD: (I) A bare reading of sections 68A to E contained in Chapter IV-A, which was added to the Act by Central Act JOO of 1956, makes it clear that they provide for nationalisation of road transport services. However, such nationalisation, in view of the provisions of section 68C, is not nationalisation for nationalisation's sake but nationalisation with a view to the achievement of certain specified objects. Unless a scheme conform~ to the two conditions referred to in section 68C, namely, (a) the S.T.U. i'S competent to prepare and publish a scheme under section 68C _only after_ it has formed the opinion that it is necessary in the public interest that road transport services covered by the scheme should be run and operated by itself, whether to the exclusion, complete or partial, of ·other persons or otherwise; and (b) the necessity for the road transport services te- be run and operated by the S.T.U. must flow, in its opinion, from the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it will fall outside the ambit of section 68C. [l012A, 1013H, 1014A-Cl Section 68D gives the right to certain persons, associations and authorities to file objections to a scheme published under section 68C within the specified period of thirty days of its publication and also lays down the procedure for the hearing and disposal of such objections by the State Government. The procedure provided in section 68D is designed to - (a) enabie parties affected by the scheme to point out flaws therein; (b) enable the State Government to find out which flaws, if any, the scheme suffers from, and (c) enable the State Government either to remedy the flaws by a suitable modification of the scheme or to rescind the scheme altogether. Under section 68(2), every objector or his representatives and the representatives of the S.T.U. have to be given an opportunity of being heard in the matter and it is only thereafter that the State Government has to exercise its power to approve or modify the scheme, which power includes the power not to approve the scheme at all and to drop it in its entirety. [1014D-F] _Malik_ _Ram_ v. _State_ _of_ _Rajast/zan,_ [1962] 1 S.C.R. 978 at 981, followed. 10@'6 SUPREME COURT REPORTS [1981] 1 S.C.R. A B ### c D E Section 68D does not specify the type of objections envisaged by it but then their purpose being to point out flaws in the scheme they must be confined to the matters covered by se,~tion 68C. If the opinion forming the basis of the scheme does not suffer from errors such as may render it abnoxious to the dictates of section 68C and on the other hand, conforms to the conditions laid down in that section, the scheme would be unobjectionable. Objections may thus be made to show: (a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.; (b) that it is not necessary in the public interest that such services be taken over by the S.T.U. to the complete exclusion (if such exclusion is envisaged by the scheme) of other persons and that their partial exclusion would suffice; (c) that it is not necessary in the pub.lie interest that such services shall he taken over by the S.T.U. even to the partial exclusion of others; (d) that the scheme is not calculated to provide an 1~fficient road transport service; (e) that the scheme would not provide an adequate road transport service; (f) that the road transport service envisaged by the scheme would not be economical; or (g) that the road transport service provided for by the scheme would suffer from lack of proper coordination. [1014H, 10!5A-E] Objections falling outside these seven categories would not be admissible inasmuch as they would not have anything to do with any of the condition,; which a scheme must satisfy in order to be covered by section 68C. [l015E-FJ 2. In order to find out if the scheme fulfils the requirements of section 68C a comparison of the attributes of the two services, such as quality, capacity, financial implications and coordination would certainly fall within the scope of the inquiry to b1: conducted· by the State Government, although a comparison would not be permissible for the sole purpose of finding out whether the private operators should be given a preference over the State Transport Undertaking. If such a comparison as held to be permissible is ruled out, the result would be to shut out from the enquiry held by the State Government under section 68D most of the material relennt for determination of the validity of the scheme - a result contemplated neither by section 68D nor by the decision or this Court in (1967] 3 S.C.R. 329. [1018A-C] Objections calculated to show that a scheme does not prnvide a road F transport service which can be considered efficient, adequate. economical or propei-ly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "prope.rly' coordinated are not absolute but more or less comparative terms. [10l7E-FI]. _Capital Multi-Purpose Co-operative Society, Bhopal and Others_ v. _T!ie_ _State_ _of_ _Madhya Pradesh and Others,_ [1967] 3 S.C.R. 329, explained. G 3. Objections of a "personal" nature may be of two types: (i) those challenging the scheme on the ground that it harms an existing operator and, (ii) those which indicate the details of the services afforded by an existing operator for the purpose of showing that service envisaged by the scheme would in comparison not be efficient, adequate, etc. Objections of the second type would be admissible, while those of the first type, would be wholly irrelevant to the determination of the validity of the scheme in view of the H postulates of section 68C and would, therefore, be inadmissible. [I018E-G] _Gul/apalli Nageswara Rao and Others_ v. _Andhra Pradesh State_ _Road_ _Transport Corporation and Another,_ [1959] Suppl. _1_ S.C.R. 319, distinguished. SARASWATI DEVI _v._ U.P. STATE _(Koshal_ _!.)_ 1007 4. It is true that the State Government was acting in the discharge of its quasi-judicial functions and it could devise its own proce~ure fin the absence of express provisions to the contrary) so that its functions could be effectively discharged. Further, when the statute gives the power to the State Government to afford to the objectors a reasonable opportunity of being heard and to take evidence, oral as well as documentary, in support of their objections, the power to send letters of request to witnesses to appear and give evidence or to produce documents is inherent in the situation and needs no statutory sanction, although; the power to enforce their attendance or compel them to produce documents is Jacking on account of. absence of conferment thereof by a statute. [10210-F] _Nehru_ _Motor_ _Transport_ _Co-operative Society Limited_ v. _The State_ _of_ _Rajasthan,_ [1964] 1 S.C.R. 220, followed. 5. Sub-rule (5) of rule 5 of Uttar Pradesh State Transport Services (Development) Rules, 1958 serves a salutary purpose and, that is, that· the inquiring authority may shut out all evidence which is sought to be brought on the record but which is either irrelevant or otherwise inadmissible. [1022G-H, 1023A] A B ### c 6. In the instant case, no right of the appellants can be said to be infringed when their applications for summoning witnesses and production of docu ments were rejected by the State Government and the rejection i' not illegal. D [1022E-F] _Capital Multi-Purpose_ _Co-operative Society,_ _Bhopal and Others_ v. _Tiu_ _State_ _of_ _Madhya Pradesh and Others,_ [1967] 3 S.C.R. 329; applied. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1755 of 1980. Appeal by Special Leave from the Judgment and Order dated 8-8-1980 of the Allahabad High Court in Civil Misc. Writ Petition No. 4376/69. _S._ _N. Kackar,_ _R._ _B. Mehrotra_ and _Pramod Swarup_ for the Appellants. _0._ _P._ _Rana_ and _Mrs. Shobha Dikshit_ for Respondent No. 1. _Yogeshwar Prasad, Mrs. Rani Chhabra,_ _P._ _K. Pillai_ and _R. N._ _Trivedi_ for Respondent No. 2. The Judgment of the Court was delivered by KoSHAL, J.-This appeal by special leave is directed against a judgment dated the 8th August 1980 of a Division Bench of the Allahabad High Court dismissing a petition instituted by the 18 appellants under article 226 of the Constitution of India in which the reliefs prayed for were (a) that the order dated the 19th July, 1969 (hereinafter referred to as the impugned order) passed by the Deputy Secretary (Judicial), Government of Uttar Pradesh, E F G H 1008 A B SUPREME COURT REPORTS 11981] 1 S.C.R. rejecting all the objections filed by the appellants to a scheme (hereinafter called the impugned scheme) published on the 21st January 1961 in the Government Gazette of Uttar Pradesh under section 68C of the Motor Vehicles Act 1939 (for brevity, the Act) be set aside as illegal, and (b) that the notification published iq the said Gazette dated . the 7th November, 1970 and approving the impugned scheme (for short, the 1970 notification) be quashed. ...... ### c D E F .G H 2. The notification dated the 21st January 1961 declared that the State Government was of the opinion that "for the purpose of providing an efficient, adequate, economical and properly co-ordinated road transport service, it is necessary in the p·ublic interest that road transport services on the routes mentioned at item No. 2 of the annexed schemes should be run and operated by the State transport undertaking to the complete exclusion of other persons" and the impugned scheme was being published on that account under section 68C of the Aot read with rule 4 ( 1) of the Uttar Pradesh State Transport Services (Development) Rules, 1958 (for short, the rules). The impugned scheme envisaged the plying of buses on the route Gorakhpur-Khajni-Gola via Dhuriapur and Malhanpur exclusively by the State transport undertaking (hereinafter described as the S.T.U.) and invited all persons whose interest was affected by it _to_ file objections thereto within 30 days of its publication in the Official Gazette. The impugned scheme was later on modified by different notifications and three allied routes were qrought withln its purview. Supplementary objections _to_ the scheme as amended were put forward by persons interested. Shri S. K. Bhargava, Deputy Secretary (Judicial) to the U.P. Government rejected all the objections and approved the scheme through the impugned order, in pursuance of which the 1970 notifi cation was published in the Government Gazette. 3. On behalf of the 18 appellants (out of whom appellants Nos. 1 to 17 are transport operators who were plying their buses on the routes covered by the impugned scheme while appellant No. 18 is the Motor Operators Association, Gorakhpur) the following grounds were put forward before the High Court in support of the prayers made : (i) The impugned scheme was vitiated by _mala fides_ inasmuch as it was the outcome of action taken by Shri Hanumant Singh Negi, Deputy Transport Commissioner, U.P., who had SARASWATI DEVI _v._ U.P. STATE _(Koshal,_ J.) 1009 threatened Shri Bajrangi Lal, Pairokar for one of the petitioners, namely, Shri Kashi Prasad Gupta, that the disputed route would be nationalised in case . the latter pursued in the Supreme Court the matter which had earlier been decided against him by the High Court. (ii) The impugned order did not deal at all with objections of a personal nature which had been filed by the appellants and which, _inter_ _alia,_ indicated that the scheme would operate to the great disadvantage of the appellants all of whom were plying buses on the disputed route and had invested huge sums of money for that purpose. (iii) The impugned order did not record specific findings on any of the objections of a "personal nature" and was liable to be quashed for that reason alone. (iv) It was incumbent on the author of the impugned order to compare the services rendered by the appellants· with those to be rendered by the S.T.U. That not having been done, the impugned order and the 1970 notification were both vitiated. 4. The High Court went at length into the question of _mala_ _fides_ artd rejected the contention of the appellants in that behalf mainly on the ground that it was not Shri Hanumant Singh Negi who had initiated the nationalisation of the disputed route but that it was the State Government under whose decision the impugned scheme was formulated. In support of ground (ii) reliance on behalf of the appellants was placed before the High Court mainly on _Gullapalli Nageiwara_ _Rao and Others_ v. _Andhra Pradesh_ _Stai'e_ _Road Transport Corpora-_ _tion and Another,_ (1) which was decic:Ied by a Bench of five Judges of this Court. The crucial question before the Court in that case was whether the authority. deciding the objections under section 680 of the Act was bound to act judicially. Subba Rao, J. (as he then was), who answered the question in the affirmative on behalf of the majority consisting of himself, Das, CJ., and Bhagwati, ., dealt at length with the provisions of sections 68C and 68D of the act and, while concluding that the mat!er partook the character of a dispute between two parties, observed : A B ### c #### n E F G "The .citizen may object to the scheme on public grounds _or_ _on personal grounds._ He may oppose the scheme on the ground that it is not in the interest of the public or on the ground H that the route which he is exploiting should be excluded from (I) (1959] Suppl. 1 S.C.R. 319. ###### 1010 SUPREME COURT REPORTS [1981) 1 s.c.R. A B #### c D E F H the scheme for various reasons. There is, therefore, a proposal and an opposition and the third party, the State Government is to decide that _Us_ and prima facie it must do so judicially. The position is put beyond any doubt by the provisions in the Act and the Rules which expressly require that the State Government must decide the dispute according to the procedure prescribed by the Act and the Rules framed thereunder, viz., after considering the objections and after hearing both the parties. It therefore appears to us that this is an obvious case where the Act imposes a duty on the State Government to decide the act judicially in approving or modifying the scheme proposed by the transport undertaking. ~ . . . . . . . . The scheme propounded may e:xclude persons from a route or routes and the affected party is given a remedy to apply to the Government . and the Government is enjoined to decide the dispute between the contesting parties. The statute clearly, therefore, imposes a duty upon the Government to act judicially. Even if the grounds of attack against the scheme are confined only to the purposes. mentioned in s. _68C-we_ _cannot_ _agree_ _with this_ _con-·_ _tention-the_ position will not be different, for, even in that case there is a dispute between the State transport undertaking and the person excluded in respect of the scheme, though the objections are limited to the purposes of the scheme. In either view the said two provisions, sections 68C and 68D, comply with the three criteria of a judicial act laid down by this Court." (emphasis supplied) Emphasis before the High Court was laid on the under-lined portions of the above observations. On the other hand, attention of the Court was invited to _Capital Multi-Purpose Co-eperative Society_ _Bhopal and Others_ v. _The State of M.P._ & _Others._ (1) on behalf of the State for the proposition that the objections to the impugned scheme had to be related to the four purposes indicated in section 68C of the Act. After giving consideration to the matter the High Court held : "There can be no quarrel with the proposition that an objection of a personal nature can be filed but it should be for the purposes of showing that the four purposes indicated in section 68C cannot be achieved. · In other words objections of the nature that. the petitioners will suffer hardShip and there will be financial loss to the petitioner or that the petitioners have (1) [1967] 3 S.C.R. 3.2!1. SARASWATI DEVI _v._ U.P. STATE _(Koshal,_ _!.)_ **1011** invested large amount cannot _per se_ be sufficient to nullify a scheme of the nature referred to above unless they have a material bearing on the purposes indicated in section 68C of the Act. When a scheme is framed for nationalisation of a route, whether wholly or partly, the necessary consequence will be that the persons who have invested their money in purchasing vehicles will be displaced and that there will be loss in their earnings. If this could have been the ground for rejecting or modifying a scheme, no scheme could be taken up. A bare perusal of section 68C indicates that the purpose of the scheme is to provide an efficient, adequate, economical and properly co-ordinated road transport service which is necessary in public interest, and such a scheme will be liable to be approved under the provisions of the Act. The objections of personal nature in the instant case in our opinion fail to r;stablish that the four purposes which are sought to be achieved by the scheme will not be achieved and for that reason the scheme should either be rejected or modified." **A** **B** ### **c** **D** Ground (iii) was repelled by the High· Court with a remark that even if objections of a personal nature were covered by section 68C the impugned order was not liable to be quashed merely on the ground that its author did not record specific findings thereon. Support for this view was sought from a Full Beach decision of the same Court reported as _Khuda Dad Khan_ v. _Stdte_ _of_ _U.P._ _and_ **E** _others(1)_ The .Jast ground of attack against the impugned order and the 1970 notific~ion also did not fittd favour with the High Court as, according to it, in _Capital Multi-Purpose Co-operative Society Bhopal_ _and Others_ v. _The State_ _of M.P._ _&_ _Others_ (supra), the Supreme Court **F** had taken the view that it was not necessary for the concerned authority to compare the services rendered by the private operators with those to be expected firom the S.T.U. It was in these premises that the High Court passed the judgment under appeal. **G** 5. Out of the grounds . put forward before the High Court on behalf of the appellants, two, namely, those listed at serial Nos. (i) and (ii) above were not pressed before us by their learned counsel, Shri S. N. Kacker, who, however, argued the point covered by ground (iv) with great force and also challenged the finding recorded by the High Court in relation to ground (iii) . In order to determine (I) [1979] A.L.J. 1249. **H** 1012 SUPREME COURT REPORTS [1981] 1 S.C.R. A B ### c D the questions raised before us and canvassed by learned counsel for the parties it is necessary to undertake an analytical study of sections 68A to 68E contained in Chapter IV A which was added to the Act by Central Act 100 of 1956. Section 68A contains two definitions. According to it - " (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' i;neans 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 under _·¥_ section 3 of the Road Transport Corporations Act, 1950; (iii) any municipality or any corporation or company owned or controlled by the Central Goverru:Ilent or one or more State Governments, or by the Central Government and one or more State Governments." Section 68B gives over-riding effect to the provisions of Chapter E IV A. Contents of sections 68C and 68D are reproduced below : F G "68C. Where any State transport undertaking is of opinion that for the purpo~e 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 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 servioes 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." ##### r "68D. (1) On the publication of any scheme in the Official H Gazette and in not less than one newspaper in regional language circulating" in the area or. route which is proposed to be covered by such scheme-· SARASWATI DEVI _v._ U.P. STATE _(Koshal,_ J.) **1013** (i) any person already providing transport facilities by A any means along or near the area or route proposed to be covered by the scheme; (ii) any association representing persons interested in the provision of road transport facilities recognised in tllis behalf by the State Government; and (iii) any local authority or police authority within whose jurisdiction any part of the area or route proposed to be covered by the scheme lies, may, within thirty days from the date of its publication in the Official Gazette, file objections [o it 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." Sub-section (1) of section 68E gives to the S.T.U. power to cancel or modify at any time any scheme published under sub-section ( 3) of section 68D and provides that "the procedure laid down in section 68C and section 68D shall, so far as it can be made applicable, be followed in every case where the scheme is proposed to be cancelled or modified as if the proposal were a separate scheme." Sub-sec~ion (2) of section 68E confers on the State Government the power to modify a scheme published under sub-section (3) of section 68D after giving the S.T.U. and any other person likely to be affected by the proposed modification an opportunity of b@ing heard in respect thereof. **B** ###### **c** **D** **F** **G** 6. A bare reading of the sections noted above makes it clear **H** that they provide for nationalisation of road transport services. However, such nationalisation, in view of the provisions of section 68C, 4--{) S. C. India/ND /81 1014 SUPREME COURT REPORTS f1981] 1 S.C.R. A is not nationalisation or nationalisation's sake but nationalisation with a view to the achievement of certain specified objects. A breakup of the section brings out the following es:>ential features. :B ###### c D E F G (a) The S.T.U. is competent to prepare and publish a scheme under section 68C _only after_ it has formed the opinion that it is necessary in the public interest that road transport services covered by the scheme should be run and operated by itself, whether to the exclusion, complete or partial, of other persons or- otherwise. (b) The necessity for the road transport services to be run and operated by the S.T.U. must flow, in its opinion, from the purpose of providing an efficient, adequate, economical and properly coordinated road tranlsport service. Unless a scheme conforms to these two conditions .it will fall outside the ambit of section 68C. Section 68D gives the right to certain persons, associations and authorities to file objections to a scheme published under section 68C within the specified period of 30 days of its publication and also fays down the procedure for the hearing and disposal of such objections by the State Government. An important feature of subsection ( 2) 0£ the section is that (every objector or hls representatives and the representatives of the S.T.U. have to be given an opportunity of being heard in the matter and it is only thereafter that the State Government has to exercise its power to approve or modify the scheme, which power includes the power not to approve the scheme at all and to drop it in its entirety), as held in _Malik Ram_ v. _State of Rajasthan_ [1952] 1 S.C.R. 978 (981). ###### The procedure provided in section 68D is thus designed to (a) enable parties affected by the scheme, to point out flaws therein, (b) enable the State Government to find out which flaws; if any, the scheme suffers from, and ( c) enable the State Government either to remedy the flaws by Y a suitable modification of the scheme or to rescind the scheme altogether. H 7. This brings us to the main point of controversy in the case, that is, the nature of objections which parties affected by a scheme may prefer to it. Section 68D does not .specify the type of objections SARASWATI DEVI _v._ U.P. STATE _(Koshal,_ J.) envisaged by it but then their purpose being to point out flaws in the scheme they must be confined to the matters covered by section 68C. If the opinion forming the basis of the scheme does not suffer from errors such as may render it obnoxious to the dictates of section 68C and on the other hanjd, conforms to the conditions laid down in that section, the scheme would be unobjectionable. Objections may thus be made to show: (a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.; ( b) that it is not necessary in the public interest that such services be taken over by the S.T.U. to the complete exclusion (if such exclusion/ is envisaged by the scheme) of other persons and that 'their partial exclusion would suffice; ( c) that it is not necessary in the public interest that such ser vices shall be taken over by the S.T.U. even to the partial exclusion of others ; ( d) that the scheme is not calculated to provide an efficient road .transport service ; ( e) that the scheme would not provide an adequate road transport service ; (f) that the road transport service envisaged by the scheme would not be economical ; or (g) that the road transport service provided for by the scheme would suffer from lack of proper coordination. 1015 A B ### c D F G H Objections falling outside the seven categories above set out would not be admissible inasmuch as they would not have anything to do with any of the conditions which a scheme must satisfy in order to be covered by section: 68C. To this conclusion there is no challenge from either side, but then it has been vehemently contended on behalf of the appe:Jlants that a comparison of the road transport services operating on the route covered by a scheme with those envisaged by the scheme itself may be necessary in order to find out if the scheme conforms {o the provisions of section 68C and this contention is controverted by learned counsel for the respondents on the strength of _Capital Multi-Purpose Co-operative Society Bhopal_ _and_ _Others_ v. _The_ _State_ _of_ _M.P._ & _Others,(_ _[1 ]_ _)_ wherein Wanchoo, J., speaking for a Bench of this Court which consisted of himself, _Bachawat_ _and_ _Ramaswami,_ JJ., observed : (1) [1967] 3 S.C.R. 329. 1016 A B ### c D E F G H SUPREME COURT REPORTS [1981] 1 S.C.R. "We are further of opinion that there is· no question of consideration of comparative merits of the State Transport Undertaking and the private operators in the con1text of Chapter IV-A. As we have said already Chapter IV-A was enacted flor nationalisation of road transport services in accordance with the amendment made in article 19(6) of the Constitution. The nationalised road transport under that Chapter can only be run by the State Transport Undertaking as defined in section 68-A(b) of the Act. In view of that fact, if nationalisation! has to come as envisaged by the amendment of the Constitution, the only body which can run the nationalised service is the State Transport Undertaking, and in those circumstances. we fail to see any necessity for comparison between a State Transport UnJdertaking on the one hand and individual operators on the other. "Apar.t from this general consideration, we are further of opinion that ordinarily no question of comparative merits based on past record between a State Transport Undertaking and individual operators can arise, Section 68-C provides that the State Trairsport Undertaking has to run an efficient, adequate, economical and properly co-ordinated road transport service, and for doing that it does not take up just one route and put one transport vehicle on it. . It takes up a large number of routes and puts a large number of transport vehicles on them in order to run an integrated service whether for passengers or for goods, or for both. In these circumstances it is difficult to see how one can compare such an undertaking with individual private operators who are running one transport vehicle or so on individual routes. Secondly, it would be unusual for the State Transport Undertaking to be run\ning transport vehicles on individual routes before it produces a scheme for nationalisation of the type provided for in Chapter IV-A, though it may be conceded that this may not be quite impossible, for some State transport undertaking might have entered into competition with private operatQrs and might have obtained permits under Chapter V; (see flor instance _Parbani Transport Co.-operative Society Ltd._ v. _The Regional_ _Transport Authority,_ [1960] 3 S.C.R. 177). Even so, when the State transport undertaking takes action under Chapter IV-A of the Act there can. in our opinion be no question of compariso111 between a State transport undertaking running an integrated service and individual operators running one transport vehicle or more on individual routes. We are therefore of opinion that SARASWATI DEVI _v._ u.P. STATE _(Koshal,_ _J.)_ **1017** **A** **B** ### **c** **E** **F** **G** ' **H** ~-. ## l ', # ~ I the authority cannot be said. to have gone wrong in not asking for past records of the Corporation in the present case for purposes of such comparison. It is true that section: 68-C requires that the scheme should be in public interest. But unless the scheme is· shown not to be efficient, adequate, economical and properly coordinated, it will in our opinion generally follow that it is in the public interest. We do not think therefore that the comparative merits of the Corporation as against individual operators require to be judged under Chapter IV-A in the public interest." A careful study of these observations would show that they were meant to exclude from consideration a comparison between the S.T.U. and private operators for the purpose of finding out which of them should be preferred on the basis of their past performance an:d not to declare irrelevant a comparison between the _service_ envisaged by the scheme and pre-existing services for the purpose of determining whether the scheme as framed provides for the operation of a service which would be efficient, adequate, economical and properly coordinated. Normally, as pointed out by Wanchoo, J., a S.T.U. takes up a large number of routes and puts a large nbmher of vehicles on them in order to run an integrated service while private operators cater to individual routes and may not, therefore, be in a position to provide what is described in section 68C as "a properly coordinated service". That does not mean, however, that all schemes, howsoever framed, would in the very nature of things provide for services which conform to the quality insisted upon by section 68C. As stated above, objections cakulated to show that a scheme does not provide a road transport service which can be considered efficient, adequate, economical or properly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "properly coordinated" are not absolute but more or less ·comparative terms. A service consisting of only one round trip per day may be adequate if the traffic on the concerned route is Jean. On the other hand, a hundred round trips may not be adequate for a route burdened with heavy traffic. If a private operator is running 10 buses either way and is sought to be replaced by the S.T.U. under a scheme which makes provision only for five rounjd trips per. day the proposed road transport service cannot be considered adequa·e if the number of round trips required to fully 1 cope with the traffic is more than five. Efficiency of the service covered by a scheme may similarly have to be determined in comparison to that which pertains to the pre-existing services: Economics and proper coordination of the service proposed in a scheme may again be 1018 SUPREME COURT REPORTS [1981] 1 S.C.R. A matters for which a comparison with the pre-existing services is called· for. In order to find out, therefore, if the scheme fulfils tlie requirements of section, 68C a comparison of the attributes of the two services, such as quality, capacity, financial implications and coordination would certainly fall within the scope of ~he inquiry to B ### c D E F G H be ~onducted by the State Government, although a comparison, would not be permissible for the sole purpose of finding out whether the private operators should be given a preference over the S.T.U. If such: a comparison as we have held to be permissible is mled out, the result would be to shut out from the enquiry held by the State Government under section 68D most: of the material relevant for determination of the validity of the scheme-a result contemplated neither by section 68D rior by Wanchoo, J., in the observations above quoted, which, on the other hand, make it clear that the proposed scheme may certainly be shown (in whatever way it is possible) not to fulfil the criteria of efficiency, adequacy, economy and proper coordination. The comparison ruled out by him was not between the merits of the rival services but between the expectations from their operators in view of their respec~ive past records includirig these relating to other areas and routes. The High Court thus erred in arriving at the conclusion that _The_ _Capital Multi-_ _purpose case_ eschewed all comparison and its finding in that behalf, in so far as it runs counter to the opinion expressed by us above, is set aside. 8. We may in pass.Ing refer to what are called objections of a "personal" nature. These may be of two types : ( 1 ) those challenging the scheme on the ground that it harms an existing operator and, (2) those which indicate the details of the services afforded by an existing operator for the purpose of showing that the service envisaged by the scheme would iu comparison not be efficient, adequate, etc. Objections of the second type, as we have just above concluded; would be admissible for the reasons stated. Those of the first type, however, would be wholly irrelevant to the determination of the validity of the scheme in view of the postulates of section 68C and would, therefore, be inadmissible. This proposition may appear at first sight to run counter to those observations of Subba Rao, J., in _Gullappalli's case_ (supra) which we have extracted above but this is not really so. Those observations were made in the course of consideration by this Court of 'the sole question whether the State Government, in deciding objections under section 68D, acted judicially or purely in an administrative capacity. The answer ro that question, according to Subba Rao, J., depended on whether the matter before the State Government amounted to a _/is_ ; and it SARASWATI DEVI _v._ U.P. STATE _(Kosha/,_ _J.)_ 1019 ~i was in that connection that he said that the citizen may object to the scheme on public grounds or on personal grounds and also that the CoUl't did not agree with the contention that the grounds of objeotion against .the scheme were confined. only to those mentioned in section 68C. The Coui1t was not called upon to decide as to whether the scheme of sections 68C and 68D embraced objections of a "personal" nature or not and it was only incidentally that reference thereto was made. We conclude .that _Gullapalli's_ _case_ (supra) is no authority for the proposition that "personal" objection not confined to the scope of the requirements of section 68C ~re admissible under section 68D. 9. Referring to ground (iii) pressed in the High Court on behalf of the appellants, Shri Kacker made a serious grouse of the fact that the impugned order did r~ot, tO . much as mentioned those obje€ tions made by the appellants which called for a comparison of the typa held by us to be permissible and htt contended that tlle impugned order was bad on that a<:rount. In reply learned colin~el for the respondents argued that at the hearing before the State Government no such objections were pressed. Our attention has been drawn by Mr. Kacker to paragraphs 14, 20(a), 21, 26, 43, 49, 51, 61, 63, 64, 73 and 75 o! the statement of objections forming anncxure F to the petifion under Article 226 of the Constitution before the High Court. A perusal of those paragraphs makes it abundantly clear .that quite a few of the objections were such as were related to it.he purposes mentionled in section 68C and called for a comparison. of the proposed service with the existing one. That some of these objections were pres<;:d before the State Government is apparent from the written arguments which were submitted to Shri S. K. Bhargava who is the author of the impugned order and which were appended to the petition under Article 226 of the Constitution of India before the High Court · in the form of ArnJ3xure J. The stand of the respondents to the contrary is thus not well founded. But then we further find that in the impugned order its author has devoted five paragraphs to the objections which cn:1ed for comparison of both the 'types above discussed. In paragraphs 24 to 27 the impugned order rightly rejects the objections which were based on a comparison of the S.T.U. with the private· operators in relation to their respective past performances, and in doing so relies correctly on _The_ _Capital Multi-purpose case._ It proceeds then (in paragraph 28) to take note of the further opinion. expressed in the same case from whkh it follows that a scheme· may A B #### c D E F G H nevel'thele~s be shown not to be in public interest by demonstrating **1020** SUPREME COURT REPORTS **[1981] 1** **S.C.R.** **A** **B** ### **c** **D** **E** **F** **G** **H** that it does not provide for a service which would be efficient, adequlllte, economical and properly coordinated ; but then dismisses the matter with 'the remark that the appellanlts had not been able "to show anything substantial which may justify this inference that the proposed scheme in respect of the routes in question would not be efficient, adequaite, economical and properly coordinated'', a remark which is obviously meant to dispose of those objections to the seheme which called for a comparison of the _service_ envisaged by it with that· a.Iready available. The cryptic remark no doubt neither lists the objections disposed of by it nor discusses the relevant evidence but the reason for the absence of a discussion _Jn_ this behalf appears to be that no such evidence had been produced before the State. Government. And if that be so, much fault cannot be found with 'the brevity of the contents of paragraph 28. However, Mr. Kacker made another grouse in this connection, namely, .that the State Government refused to summon witnesses and to enforce the production of documents at the request of the appellants and that in doing so it had acted illegally and by thus shutting out evidence had really denied to the appellants any real opportunity of being heard. We find that when the case was at the evidence stage before the State Government, the appellants submitted two applications requesting that witnesses, one of whom, namely, the Secretmy, Legislative Assembly, U.P. was to bring the proceedings· of that Assembly, relating to the speech of the Chief Minister delivered on the 13th July 1967 i:r.; refation to the budge~ of the Trnnsport Department, be summoned through letters of request and examined. The applic<Hions were rejected by Shri S. K. Bhargava through an order dated 1the 20th March 1969, the relevant part of which runs thus : "It is noit necessary to issue letters of request as prayed for. The objectors can only examine those witnesses whom they themselves brought. It is also not necessary tio send for any record as prayed." No further reasons appear in; the order for a reject,ion of the prayer made for issuing letters of request but it seems that while making the order Shri Bhargava had in mind the provisions of sub-rules (2) and ( 4) of rule 7 of: the Rules and of the absence from . the Act and the Rules of any express provision conferring on the State Government the .right to issue process for enforcing the attendance of witnesses and the production of documents. The said two sub.rules may be reproduced : ·---.' ##### \ _(_ SARASWATI DEVI _v._ U.P. STATE _(Kasha!,_ _**J.)**_ **1021** "(2) The said officer shall fix tlle date, time and place for the hearing of the objections and issue notices thereof to the objector, and the representatives of the State transport under###### taking, calling upon them to appear before him in\ person, or. through a duly authorised agent or counse'l and 'to produce their oral and documentary evidence on the date fixed for hearing." " ( 4) Subject to the provisions of sub-rule ( 7) the objector and the State transport undertaking shall produce their evidence and witnesses, necessary and relevant to the inquiry, on the first date fixed for the hearing." The contepltion raised on behalf of the respondents is that the power - the exercise of which the appellants sought by their applic11tions had not been conferred by the Act or the Rules on the State Government and that, therefore, the order passed by Shri Bhargava was .correct. We find substance in this contention. It is true that the State Government was acting in the discharge of its quasi-judicial functions and it could devise its own procedure (in the absence of express provisions to the contrary) so that its functions could be effectively discharged. Further, when the s'tatute gives the power to the State Government to afford to the objectors a reasonable opportu ~ nity of being heard and to take evidence, oral as well as documentary, in support of th~ir obj:ctions. the power to send letters of request to witnesses to appear and give evidence or, to produce documents is inherent in the situation and needs no statutory sanction, although the power to enforce their attendance or compel them to produce documents is lacking on accoun't of absence of conferment thereof by a statute. This view finds support from _Nehru Motor_ _Transport Co-operative Society Limited_ v. _The State_ _of_ _Rajasthan,_ (1) in which also the argument raised was that there could be no effective hearing without a provision for coercive process compelling attendance of witnesses and production of ·documents. It was pointed out in. that case that the Rajasthan Rules did ·not provide for compelling .the attendance of witnesses and that it was enough if the authority took evidence of witnesses whom the objector produced before it. It was also remarked that the authoi;hy might (i) [1964] I S C.R. 220. **A** **B** ### **c** **D** **E** **F** **G** **H** 1022 SUPREME COURT **REPORTS** **(1981]** **1** S.C.R. **A** help the objector to secure their attendance by issue of summonses, though in the absence of any provision in the !aw, the witnesses might or might not appear iq answer thereto. But then the question arises whether an order of the State Government: rejecting a prayer for issuance of summons or ktiers **B** of request would be illegal. This question was answered in the negative by Wanchoo, J., in the _Capital Multi-purpose case_ (supra) with the following observations : ### **c** **D** **E** **F** "Further, reliance in this connjection is placed on the observation of this Court in _Nehru Motor Transport Co-operative Society's_ _case_ (supra) that the authority might help the objectors by issuing summonses. This observation in our opinion does n<?t mean, in the absence of any provision in the Act or the Rules, that the authority was bom1/d to summon witnesses even though the persons summoned were not bound to obey the su:tmnonses as there was no provision in law foc issue of such summonses. The use of the words 'by issue of summonses' in the circumstances of that case was by oversight, for issue of summonses presum~ that there is authority to issue them and the person to whom they are issued is bound to obey. But: in the absence of such power all that the authority can do is to issue letters merely requestin,g persons to appear and it is open to those persons to appear or not. In this situation if an authority decides not to issue such letters it cannot be sai.d that there was no effective hearing." These observations have: our concurrence and we do not find that any right of the appellants was infringed when their applications for summoning witnesses and production of documents were rejected. Here we may briefly advert to another aspect of the matter to which our attention was drawn on behalf of the respondents. Subrule ( 5) of rule 5 of the Rules states : "A person filing an objection and desiring to be heard shall also **G** submit along with the memorandum of objections, a list of documents and wi~nesses with their names and addresses and a brief summary of: the nature and type of evidence which each such witness is likely .to give." No compliance with this rule was made by the appellants when the **H** two applications just above considered were filed. The sub-rule serves a salutary purpose and,. that is, that the inquiring authority may shut ouv all evidence which is sought to be brought on the record SARASWATI DEVI _v._ U.P. STATE _(Koshal,_ J.) 1023 but which is either irrelevant or otherwise inadmissible. The two A applications, therefore, suffered from a serious flaw by reason of which alone they merited dismissal unless the summary insisted upon by sub-rule (5) was supplied before they were disposed of. B #### c # _)c_ 10. In 1the result the appeal must fail in spite of the fact that we have accepted one main contention raised by Mr. Kacker, namely, that objections involving comparison of the pre-existing services with those proposed in: a scheme are relatable to the ingredients of section 68C and are, therefore, admissible under section 68D of the Act. Accordingly it is dismissed but with no order as to costs. S.R. _Appeal dismissed._