Judgement

WANCHOO, J. : These two appeals on certificates granted by the Allahabad High Court raise common questions and will be deal with together. The appellant, Kumaon Motor Owners Union Limited (hereinafter referred to as the union) was established in 1939 and had at the date of the writ petitions, 330 members all of whom owned transport vehicles. These members have public carrier permits as well as stage carriage permits, which are in force in the Kumaon region except on certain notified routes. The permits of the various members of the union are valid upto various dates falling in the years 1966 and 1967.

2. On August 17, 1964, the State Government purporting to exercise powers under Cls. (gg) and (i) of sub-rule (2) of R. 131 of the Defence of India Rules, 1962 (hereinafter referred to as the Rules) issued a notification by which it was directed that with effect from October 1, 1964, no private operators shall ply any vehicle or class of vehicles for the carriage of persons or goods on, and no vehicles or class of vehicles operated by the private operators shall pass through, Tanakpur-Dharchula route of Kumaon region . It was further directed in the notification that on this route, the U. P. Government Roadways vehicles alone shall ply for the carriage of passengers and goods. The result of this notification was to stop plying of all vehicles belonging to the members of the union on the route in question and this led to the filing of the two petitions in the High Court. The union was party to both the petitions, which were in the same terms.

3. In the petitions the appellants challenged the notification of August 17, 1964, and this challenge was based on four grounds. In the first place, it was contended that no order of the kind passed on August 17, 1964 could be passed under R. 131 (2) (gg) and (i). In the second place, it was contended that the U. P. Government was contemplating nationalisation of this route in the Kumaon region for a long time prior to August 1964. Eventually, however, instead of proceeding with the scheme of nationalisation which would have necessitated payment of compensation to operators plying in the region, the Government decided to circumvent the provisions of Ch. IV- A of the Motor Vehicles Act, (No. 4 of 1939) and introduced nationalisation through the device of an order under Cls. (gg) and (i) of R. 131 (2) of the Rules. So it was contended that the action of the State Government in passing the challenged order was mala fide. Thirdly, it was contended that S. 44 of the Defence of India Act, No. 51 of 1962, (hereinafter referred to as the Act) had been contravened by the order. Lastly, the contention was that the satisfaction necessary for passing the order under the Act and the Rules had not been shown by the affidavits filed on behalf of the State Government and therefore the condition precedent to the passing of such an order was absent.

4. The petitions were opposed on behalf of the State Government. It was not disputed that at one time prior to August 1964 the State Government had thought of nationalising this route and this matter was under consideration for sometime since 1962. But the State Government justified the passing of the impugned order on the ground that since 1960 reports had started coming in from the State Intelligence Department that certain anti-national and subversive elements were infiltrating the transport organisation and were exercising influence over the drivers, employees and other private operators of the union. As far back as October 1960, the Deputy Commissioner, Almora had sent a report to Government that it was necessary in the interest of national security that no new routes in Pithoragarh should be given for operation to the union and that their operation should be limited to Almora proper. Thereupon in a meeting of high officials on November 14, 1960, it was decided that the Deputy Inspector General Intelligence should supply the Transport Commissioner wi