LexGULLAPALLI NAGESWARA RAO AND OTHERS versus ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION AND ANOTHER
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(1) S.C.R. SUPREME COURT REPORTS 319 GULLAPALLI NAGESWARA RAO AND OTHERS v. ANDHRA PltADESH STATE ROAD TRANSPORT CORPORATION AND ANOTHER (S. R. DAS, c. J., N. H. BHAGWATI, B. P. SINHA, K. SunnA RAO and K. N. WANCHOO, JJ.) Road Transport-Nationalisation-Scheme proposed by State Transport Undertaking approved by Government-Procedure, if violative off undamental rights-Scheme, if ultra vires-State Govern- ment~ if must act judicially in approving the scheme-' Colourable legislation', Meaning of-Motor Vehicles Act (IV of r939), as amended by Act zoo of r956, Ch. IV A, ss. 68C, 68D-Constitution of India, Art. 3r. With a view to nationalise the road transport services under Ch. IV A of the Motor Vehicles Act, 1939 (IV of 1939), inserted into it by the amending Act 100 of 1956, the General Manager of Andhra State Transport Undertaking published a scheme under s. 68C of the Act in the Official Gazette and invited objections thereto. By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Depart- ment, who was in charge of Transport, but were decided by the Chief Minister. The State Government approved of the scheme and published it in the Official Gazette. The petitioners, who were plying their buses on various routes in the Krishna District as permit-holde~s under the Act, apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme, applied to this Court for the protection of their fundamental rights to carry on their business. It was contended, inter alia, on their behalf, (1) that Ch. IVA of the Act was a piece of colourable legislation whose real object was to take over their business, under cover of cancellation of permits, in contravention of Art. 31 of the Constitution, (2) that the scheme itself was ultra vires the Act, for the reason, amongst others, that the State Government whose duty it was to act judi- cially in approving the scheme, had transgressed certain fpnda- mental principles of natural justice. Held (Per curiam), that the question of colourable legislation was, in substance, really one of legislative competence of the legislature that enacted it. The legislature could only make laws within its legislative competence. Its legislative field might be circumscribed by specific legislative entries or limited by funda- mental rights created by the Constitution. The legislature could not over-step the field of its competency, directly or indirectly. It would be for the Court to scrutinize if the legislature in pur- porting to make a law within its sphere, in effect and substance, November J. 320 SUPREME COURT REPORTS [1959] Snpp. 1958 reachecl beyond it. If, it had in fact the power to make the law, its moth·e in making it would be irrelevant. G11llapulli /\. C. GaJ11pati i\'araya11 Dco v. The Stale of Orissa, [1954] Nngeswaro Rao S.C.J~. J, followed. t111d Others The State of Bihar v. Maliarajadkiraja Sir Kameshwar Singh A h v. h nf Darbhanga, fr952] S.C.R. RSg, ronsidcrecl. •d '" Pr.idn S . I 1 . I I b . Cl 51,11, Rond Tran.~- o JU< ge<: it cou ( i:iot _e satd that , 1. IV.<\ of the Act \VJ.S tnrt Corport1tion a colourable piece of leg1s]at1on. and A11otlter The po\ver vested in the Regional Transport Authority by s. 68l' of the Act involved no transfer of business of the existing permit-holders to the State Transport Undertaking nor could the latter be said thereunder to ta.ke over any assets of the forn1er. Section 68G of the .\ct in providing for co111pcnsation for nn~ expired P<'riod of the permit did not imply that Ch.!\'.\ of the 1\t't in,·oJ,·cd any transfer of property or po:;session so as t0 <'ntitle the permit-holder to any compensation under Art. 31(2) of the Constitution. Chapter IVA of the Act <licl not, therefore, in- fringe the fundatnental right of the petitioners under 1\rt. 31 of the Constitution. Per Das, (. J .. Bhagwati and Subba Rao, JJ.-While the purpose of s. fiSC of the Act was no doubt to provide a stheme of road transport service on the lines prescribed by it, the scheme proposed might affect the rights of individual permit-holders by excluding them, partially or completely. from the business in any particnlar route or routes, and the procedure prescribed bys. 680 ancl Rules 8 and ro framed under the Act, requird that the Gowrnment should hear both the objectors and the State Trans- port Un
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