1. Nationalisation of bus transport services under the Motor Vehicles Act — Challenge to schemes approved by a Minister — Allegation of personal bias disqualifying the authority. (Para 1 , 4 , 5 , 6 , 7 )
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1964 Supreme(SC) 244
SUPREME COURT OF INDIA
5th October 1964
P.B. GAJENDRAGADKAR, C.J.I., K.N. WANCHOO, M. HIDAYATULLAH, RAGHUBAR DAYAL,AND J.R. MUDHOLKAR,JJ.
The A.P. State Road Transport Corporation, Hyderabad and another (In all the Appeals), Appellants
Versus
1. Sri Satyanarayana Transports (Private) Ltd., Guntur and others (In C. A. No. 382 of 1962),
2. Thiyyagura Venkata Subba Reddy and others (In C. A. No. 383 of 1962),
3. Shaik Pentu Saheb and others (In C. A. No. 384 of 1962),
4. Ankamma (In C. A. No. 385 of 1962), 5. Kadruvalli Motor Transport Co. Guntur and another (In C. A. No. 386 of 1962), Respondents.
Civil Appeals Nos. 382 to 386 of 1962.
Advocates appeared
Mr. S. V. Gupte, Addl. Solicitor General of India (Mr. B. R. G. K. Achar, Advocate, with him), for Appellants; Mr. T. V. R. Tatachari, Advocate, for Respondents in C. A. No. 382 of 1962.
Advocates:
B.B.G.K.Achar, S.V.Gupta, T.V.R.TATACHARI
B.B.G.K.Achar, S.V.Gupta, T.V.R.TATACHARI
A quasi-judicial authority must act impartially and above suspicion of unfairness. If personal bias is established, the authority is disqualified from deciding the matter, rendering any resulting order invalid as it violates the fundamental principles of natural justice.
Headnote:(A) Motor Vehicles Act, 1939 - Sections 68C and 68D(2) - Principles of Natural Justice - Bias in quasi-judicial proceedings - A person acting in a quasi-judicial capacity must deal with the matter objectively, fairly, and impartially. Anything which tends or may be regarded as tending to cause such a person to decide a case otherwise than on evidence must be held to be biased. No one can act in a judicial capacity if his previous conduct gives ground for believing that he cannot act with an open mind. A person trying a cause, even in quasi-judicial proceedings, must not only act fairly, but must be able to act above suspicion of unfairness. (Para 9)
(B) Disqualification due to Bias - If a person is hostile to a party whose cause he is called upon to try, such bias introduces an infirmity that disqualifies him from trying the cause. Once bias is held proved, the order passed by the authority is incompetent and invalid. (Para 9)
(C) Appreciation of Evidence - In the absence of cross-examination, when dealing with competing affidavits, the court must scrutinize the affidavits critically to determine where the probabilities lie. Findings of fact recorded by the High Court on affidavit evidence are generally not interfered with unless the conclusion is found to be incorrect or perverse. (Paras 11, 15)
Facts of the case:
Orders were passed by a Minister approving schemes for the nationalization of bus transport. A private transport operator challenged these orders, alleging that the Minister had a personal bias against the managing director of the operator's company. The allegation was that the Minister had sought the managing director's assistance in securing votes for a political election and, upon the managing director's failure to do so, threatened him with dire consequences. It was further alleged that the Minister subsequently modified the sequence of the nationalization schemes to cause financial loss to the operator's company. The High Court set aside the orders on the ground that the Minister was actuated by bias.
Findings of Court:
The court found that the Minister's counter-affidavits were evasive and unsatisfactory, particularly regarding his relationship with a key witness, the booking of trunk calls, and the meeting with the managing director. The evidence provided by the respondent, including trunk call records and affidavits from persons of status, corroborated the story of bias. The High Court's finding of fact was deemed reasonable and not subject to interference.
Issues: Whether the Minister who approved the nationalization schemes was disqualified from doing so due to personal bias, and whether the High Court was correct in setting aside the impugned orders on this basis.
Ratio Decidendi: The court ruled that the elementary rule of natural justice requires a person trying a cause in a quasi-judicial proceeding to be free from personal bias. If the authority is disqualified by bias, the resulting order is invalid. Since the evidence established a personal grudge and threat by the Minister against the party, the principle of impartiality was violated, rendering the order incompetent.
Result: Appeals dismissed.
Legal Category Hierarchy
- administrative law
-
constitutional law
-
fundamental rights
- article 14 (Para 8)
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fundamental rights
- practice and procedure
- transport law
Table of Contents
2. Validity of publication — Power to implement schemes piecemeal — Personal bias of the Minister — Discrimination under Article 14 due to change in scheme order. (Para 2 , 3 , 8 )
3. Evaluation of competing affidavit evidence — Finding of evasive denials by the Minister — Corroboration of bias through trunk call records and witness testimonies. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 )
4. Quasi-judicial authorities must act impartially — Personal bias disqualifies an authority from hearing a cause — Natural justice requires the absence of suspicion of unfairness. (Para 9 , 10 )
5. Appeals dismissed — High Court order setting aside the impugned schemes upheld. (Para 25 )
6. What is the legal standard for bias in quasi-judicial proceedings?
A person acting in a quasi-judicial capacity must deal with the matter objectively, fairly, and impartially. Any factor tending to cause a decision based on something other than evidence, such as pecuniary interest or personal hostility, constitutes bias and disqualifies the person from trying the cause. (Para 9 )
7. Does failure to raise an objection to bias at the initial stage preclude a party from challenging the order later?
While a party may be precluded from raising the contention in their own writ proceedings if they failed to object at the proper stage, the presence of bias renders the order incompetent and invalid in law, potentially affecting the entire order regardless of individual waivers. (Para 10 )
8. How should courts evaluate competing affidavit evidence in the absence of cross-examination?
Courts must adopt a cautious, circumspect, and careful approach, scrutinizing affidavits critically to determine where probabilities lie. If one party's denials are evasive and the other's claims are corroborated by independent evidence or the status of the witnesses, the court may accept the latter. (Para 15 , 17 , 24 )
9. Does changing the serial order of nationalisation schemes constitute discrimination under Article 14?
No, provided the statute does not require the serial numbers assigned in proposed schemes to be invariably adopted in the final order. Such numbers are typically for convenience and to indicate that nationalisation will be brought into force in phases. (Para 8 )
Judgment
GAJENDRAGADKAR, C.J.I.: These five appeals arise out of five writ petitions filed by the respective respondents in the Andhra Pradesh High Court against the Andhra Pradesh State Road Transport Corporation, and the State of Andhra Pradesh, appellants 1 and 2, challenging the validity of the orders passed by appellant No. 2 under S. 68D(2) of the Motor Vehicles Act (No. 1 of 1939) (hereinafter called the Act) on the 18th October, 1960 approving schemes for the nationalisation of bus transport in the area of Guntur. It appears that appellant No. 1 published in the Andhra Pradesh Gazette on the 26th May, 1960 ten schemes in respect of the area of Guntur for the purpose of taking over that road transport services from private operators under Chapter IVA of the Act. Objections were then called for from persons affected by the schemes, and the then Minister in charge of Transport Mr. S. P. B. Pattalhi Rama Rao, heard the said objections and ultimately approved the schemes with certain minor modifications on the 18th October, 1960. In the result, he ordered that the schemes should come into force on the dates specified in the Government Orders. These schemes were duly notified under G. O. Ms. Nos. 2230 to 2239 in the Andhra Pradesh Gazette (Extraordinary) dated 27th October, 1960. It is against the order passed by the Minister on the 18th October, 1960 that the five writ petitions were directed.
2. In their writ petitions, the respondents challenged the validity of the impugned order on serveral grounds. They urged that the initial publication of the proposed schemes under S. 68C was invalid, because they failed to give particulars as to the dates on which the respective schemes would be put into force. According to the respondents, failure to notify the said dates had virtually deprived them of adequate opportunity to file their objections. It was also contended by them that the impugned order empowered the Chief Executive Officer to carry out the schemes piecemeal, and that rendered the order invalid. Certain other contentions were also raised. All these contentions were rejected by the High Court and in normal course, the writ petitions would have been dismissed.
3. But, in one of the writ petitions No. 868 of 1960, a further contention had been raised against the validity of the impugned order. It was alleged that the conduct of the State Government in approving the schemes amounted to colourable exercise of its power under the Act inasmuch as the Minister in charge of the portfolio of Transport had a personal bias against Mr. Thummala Ramakotaiah, one of the petitioners in the said writ petition. The case thus presented by the petition raised a serious argument about the bias of the Minister; and on this point, affidavits were filed in support of the petition, and the Minister in question filed counter-affidavits in reply. The High Court examined this plea and came to the conclusion that it had been satisfactorily established that at the time when the Minister heard the objections filed by the respondents against the proposed notified schemes, he was actuated by bias; and in that view, the High Court has set aside the impugned order. The High Court did hold that Ramakotaiah, one of the petitioners in W. P. No. 868/1960 had not taken this objection before the Minister when he dealt with the relevant schemes under S. 68D (2); and that, in the opinion of the High Court, precluded the petitioners in the said writ petition from taking the plea about the bias of the Minister so far as their writ petition was concerned. However, once the bias was held proved, in law it followed that the order passed by the Minister was incompetent, because the presence of the bias in his mind disqualified him from hearing the objections against the proposed notified schemes. In that view of the matter, in the result, it made no difference to the petitioners in W. P. No. 868/ 1960 because the whole of the impugned order was set aside. It is against
