RAM CHANDRA PALAI AND OTHERS versus THE STATE OF ORISSA AND OTH

Citation: [1956] 1 S.C.R. 28 · Decided: 20-01-1956 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Dismissed

Judgment (excerpt)

1956 
The State of 
Bombay 
v. 
R. S. Nanji 
lmam·J. 
1956 
January 20 
28 
SUPREME COURT REPORTS 
(1956] 
of the High Court is set aside. 
Costs in the appeal in this Court shall be paid by 
the appellant to the respondent as directed by the 
order granting Special Leave. Each party, however, 
will bear his own costs in the High Court. 
RAM CHANDRA PALA! AND OTHERS 
v. 
THE STATE OF ORISSA AND OTHERS. 
(S. R. DAS, ACTING C.J., BHAGWATI, JAGANNADHA-
DAS, B. P. SINHA AND JAFER IMAM JJ.] 
Fundamental Bights, Infringement of-Acts creating virtual 
State monopoly in motor transport busine:s-Application of one Act 
to certain groups of owners and another to certain others operating 
different routes in different localities-If makes for discrimination 
and inequality-If restricts rights to hold property and practise 
trade and business-Notification terminating permits for taking over 
transp01·t business, if confiscates property without cmnpensation-
Freedom of inter-state and intra-state trade, if a fundamental right-
Constitution of India, hts. 14, 19(1)(!) and (g), 31(2), 301, 305-
0rissa Motor Vehicles (Regulation of Stage Carriage and Public Car-
rier's Services) Act, 1947 (Orissa Act XXXVI of 1947), s. 4-0rissa 
Motor Vehicles (Amendment) A.ct, 1948 (Orissa Act I of 1949), s. 1. 
The petitioners were owners of Stage Carriage Services holding 
permits under the Motor Vehicles Act of 1939. 
The State Govern-
ment of Orissa, in pursuance of its scheme of a Nationalised State 
Transport as contemplated by the Orissa Motor Vehicles (Regulation 
of Stage Carriage and Public Carrier's Services) Act of 1947 (Orissa 
Act XXXVI of 194 7) and Orissa Act I of 1949, which amended the 
provisions of the Motor Vehicles Act of 1939, issued notifications 
under those Acts intimating the owners of different Stage Carriage 
Services operating different routes within the districts of Orissa that 
,.. 
with effect from the 1st ol January, 1955, either the Orissa Road 
Transport Co. Ltd., or the State Transport Service, formed under 
the two Acts 1 would exclusively operate the said routes. The owners 
impugned the Acts as unconstitutional and violative of their funda-
mental rights. It was contended that the two Acts, whose provi-
sions were materially different, discriminated against them and in 
favour of the aforesaid transport services as also in their arbitrary 
application to different zones and territories of the State and con-
travened Art. 14 of the Constitution. It was lurther contended that 
the provisions of the Acts and rules framed thereunder infringed 
Arts- 19(1)(f) and (g) by putting restrictions on the rights to hold 
property and to practise trade and business, that the Notifications 
S.C.R. 
SUPREME COURT REPORTS 
29 
purporting to take away their transport business amounted to con· 
1956 
fiscation without compensation and infringed Art. 31(2) and lastly, 
that th~ impugned Acts violated freedom of inter-state and intra-
Ram Chandra 
state trade guaranteed by Art. 301 of the Constitution. 
Palai and others 
Held, that the owners of Stage Carriage Services operating The Stat:~/ Orissa 
a particular route or in a particular area formed a sepe.rate group or 
and others 
class by themselves and so long as each one of such a group or class 
was governed by the same Act and treated alike, there could be no 
discrimination. The Government was the best judge as to which 
of the two impugned Acts, or the Act of 1939 which they sought to 
amend, should, in its administrative convenience, be e.pplied to a 
particular locality or what mode it should follow for the implemen-
tation of its scheme and such zonal or territorial divisions it 
thought fit to make for that purpose according to different circum-
stances prevailing in different localities could not be held to be 
either discriminatory or violative of the equal protection of law. 
That' the position of the permit: holders under the two Acts was 
not on a par, e.nd was materially different and they fell into two 
distinct classes and, consequently payment of compensation under 
one and non-payment under the other did not make for discrimina-
tion. 
That the contention that the impugned Acts created a. 
monopoly in favour of either the Joint-Stock Company or the State 
by ousting the private Stage Carriage Services from the business and 
thereby infringed Art. 19(1)(f) was no longer tenable in view of Art. 
19'( 6) of the Constitution as a.mended by the Constitution (First 

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