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IN THE HIGH COURT OF ALLAHABAD
Mukerji and G. Mehrotra, JJ.
JAIN TRANSPORT AND GENERAL TRADING CO. - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
Civil Misc. Writ 1579 Of 1956
Decided On : 12/19/1956
The impugned U.P. Road Transport Services (Development) Act, 1955 (U.P. Act No. IX of 1955) is a valid piece of legislation. The Act is protected under Article 19 (6) (ii) of the Constitution, which permits the State to carry on any trade or business to the exclusion of citizens. The Act provides for compensation for the property acquired or taken over by the State, and the compensation payable is determined based on a formula provided in the Act. The Act does not violate the guarantee of freedom of inter-State and intra-State trade and commerce provided for by Article 301 of the Constitution, as it is protected under the amended Article 305 of the Constitution. The Act does not discriminate against private individuals in favor of the State, as the State can reasonably form a separate category for favorable legislation. The Act does not give unguided and unfettered discretion to the State to associate such persons as it likes in the transport business, as the grant of permits to private operators is regulated by the provisions of the Motor Vehicles Act. The Act does not permit delegation of essential legislative function, as it lays down the standard and policy for the guidance of the State Government.
Fact of the Case:
The petitioners, who were private bus operators, challenged the validity of the impugned Act on the grounds that it violated their fundamental rights guaranteed under Articles 19 (1) (g), 31 (2), and 14 of the Constitution, and that it was discriminatory in its character and contravened the provisions of Article 301 of the Constitution.
Finding of the Court:
The Court held that the impugned Act was a valid piece of legislation and rejected the petitioners' writ petitions. The Court found that the Act was protected under Article 19 (6) (ii) of the Constitution, which permits the State to carry on any trade or business to the exclusion of citizens. The Court also found that the Act provided for compensation for the property acquired or taken over by the State, and that the compensation payable was determined based on a formula provided in the Act. The Court further found that the Act did not violate the guarantee of freedom of inter-State and intra-State trade and commerce provided for by Article 301 of the Constitution, as it was protected under the amended Article 305 of the Constitution. The Court also held that the Act did not discriminate against private individuals in favor of the State, as the State can reasonably form a separate category for favorable legislation. The Court further held that the Act did not give unguided and unfettered discretion to the State to associate such persons as it likes in the transport business, as the grant of permits to private operators is regulated by the provisions of the Motor Vehicles Act. Finally, the Court held that the Act did not permit delegation of essential legislative function, as it lays down the standard and policy for the guidance of the State Government.
Issues: 1. Whether the impugned Act violated the petitioners' fundamental rights guaranteed under Articles 19 (1) (g), 31 (2), and 14 of the Constitution? 2. Whether the Act was discriminatory in its character and contravened the provisions of Article 301 of the Constitution?
Ratio Decidendi: 1. The impugned Act is protected under Article 19 (6) (ii) of the Constitution, which permits the State to carry on any trade or business to the exclusion of citizens. 2. The Act provides for compensation for the property acquired or taken over by the State, and the compensation payable is determined based on a formula provided in the Act. 3. The Act does not violate the guarantee of freedom of inter-State and intra-State trade and commerce provided for by Article 301 of the Constitution, as it is protected under the amended Article 305 of the Constitution. 4. The Act does not discriminate against private individuals in favor of the State, as the State can reasonably form a separate category for favorable legislation. 5. The Act does not give unguided and unfettered discretion to the State to associate such persons as it likes in the transport business, as the grant of permits to private operators is regulated by the provisions of the Motor Vehicles Act. 6. The Act does not permit delegation of essential legislative function, as it lays down the standard and policy for the guidance of the State Government.
Final Decision: The Court held that the impugned Act was a valid piece of legislation and rejected the petitioners' writ petitions.
( 1 ) THE petitioner Jain Transport and General Trading Company and a large number of other persons, who are petitioners in the connected writ petitions, carried on the business of plying motor vehicles and stage carriages on hire in the State of Uttar Pradesh. Their rights have been regulated under the Motor Vehicles Act of 1939. The petitioner held permit Nos. 8-A and 9-A under the Act for running stage carriages on Aligarh-Iglas-Mathura route. These permits were granted to the petitioner in the year 1954 and under the provisions of the Motor Vehicles Act were valid upto August 1957. Sometime in the year 1947 the State Government conceived the idea of running their own buses on the public thoroughfares. In the beginning they decided to run as competitors with private bus owners but later on they decided to run in exclusion of private bus owners. This was sought to be done with the aid of the Motor Vehicles Act. Under the provisions of Section 42 (3) of the Motor vehicles Act, the State Government had not to obtain permits for their own vehicles and could run any number of carriages they liked. In order to carry out this object of State monopoly the transport Authorities started cancelling the permits issued to the private operators and refusing to renew their permits. In the year 1949 in pursuance of the aforesaid policy the transport authorities granted only temporary permits to the stage carriage permit holders. In 1950 the petitioner was also served with a notice by the Regional Transport authority to the effect that the Government intended to run their own stage carriages, that the petitioner would not be allowed to run his stage carriages and that the petitioners application for the renewal of the permit was not to be considered. Thereafter the petitioner along with a number cf other bus operators filed a writ petition under article 226 of the Constitution for issue of an appropriate writ against the unauthorised use of the provisions of the Motor Vehicles Act by the Government. That petition was disposed of by a Full Bench of this Court. Thereafter as the State Government, intended to have the exclusive right to operate road transport services within its territory, the u. P. Transport Act II of 1951 was passed which became law from 10-2-1951. The constitutionality of this Act was also challenged later on by means of a writ petition under article 226 of the Constitution in this Court. This Court by its decision dated 17-11-1953 held that the U. P. Transport Act II of 1951 was a constitutional Act and rejected the writ petition.
( 2 ) AN appeal was filed against the decision of this Court to the Supreme Court and also petitions under Article 32 of the Constitution were directly filed in the Supreme Court. The Supreme court by its judgment dated 13-10-1954 allowed the appeal and declared the U. P. Transport Act ii of 1951 unconstitutional. Thereafter a further assistance was sought of the Legislation and u. P. Road Transport Services (Development) Act IX of 1955 hereinafter called the impugned act was passed by the U. P. Legislature. This was published in U. P. Gazette of March 24, 1955. Under Section 3 of the aforesaid Act a notification dated 17-5-1955 which was published in U. P. Gazette dated 21-5-1955, was issued. A scheme was promulgated under the provisions of the act which directed that certain route specified therein would be exclusively served by stage carriages of the State Government and all private operators were excluded from those routes. Subsequent to that, a notification under Section 4 of the Act dated 3-11-1955 was published on 12-11-1955, formulating schemes under the Act. There was a scheme formulated for the Aligarh-Iglas-Mathura route from which the present petitioner was excluded from plying stage carriages and the permits held by the petitioner were transferred to other routes. Certain objections were fried to this scheme. It is not necessary at this stage to deal with further facts r
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