judgement:
ivil Appeal Nos.
2316/69 and 1598/70.
From the Judgment and order dated 14/17/18th March, 1969 of the Gujarat High Court in S.C.A. No. 729/68.
908 R. H. Dhebar and M. N. Shroff for the Appellants in C.A. 2316/69.
D. V. Patel, M. V. Goswami and Ambrish Kumar for RR 1 5 in C.A. 2316/69 and RR.
1 4 in C.A. No. 1598/70.
The Judgment of the Court was delivered by DESAI, J.
These two appeals by certificate under article 133(1)(c) of the Constitution arise from a judgment rendered by the Gujarat High Court in Special Civil Application No. 720/68, being a petition under article 226 of the Constitution challenging the validity of a notification issued by the Government of Gujarat on 10th october 1967 under section 6 of the Land Acquisition Act, 1894 ( 'Act ' for short).
Civil Appeal No. 2316/69 is preferred by the original respondent No. 2 Gujarat State Transport Corporation, and the cognate Civil Appeal No. 1598/70 is preferred by the State of Gujarat, the first respondent in the petition.
As both the appeals arise from the same proceedings and raise identical contentions they were heard together and are being disposed of by this common judgment.
A notification under section 4 of the Act was issued by the former Governent of Bombay on 10th October 1952 notifying that final plots 41, 42 and 43 were likely to be needed for a public purpose, viz., State Transport.
The respondents who are tenants of different parcels of land comprised in the aforementioned final plots objected to the proposed acquisition.
Soon after filing the objections under section 5A of the Act the respondents fild Civil Suit No. 1262/53 in the Court of Civil Judge, Second Division, Ahmedabad, for a declaration that the notification under section 4 was illegal and ultra vires and for an injunction restraining the respondent State from proceeding with the acquisition of the lands in possession of the respondents.
During the pendency of this suit the then Government of Bombay, after considering the report submitted under section 5A, made a declaration under section 6 as per the notification dated 14th August 1953 declaring, inter alia, that final plots 41, 42 and 43 were required for the purpose of State Transport.
The respondents amended their plaint adding a relief for quashing the notification under section 6.
The suit filed by the petitioners was dismissed by the trial court and first and second appeals did not meet with success.
They carried the matter to this Court and succeeded as per judgment reported in Valjibhai Muljibhai Soneji & Anr.
vs The State of Bombay (now Gujarat) & Ors.(1).
As per that judgment this Court decreed the plaintiff 's suit which would imply that this Court quashed both notifications under sections 4 and 6.
Reading the judgment as a whole it 909 appears that the validity of section 4 notification was upheld and only the notification under section 6 was struck down.
In the mean timn on the bifurcation of the erstwhile State of Bombay these land acquisition proceedings came within the cognizance of Government of Gujarat and when the State Government became aware some where in 1965 about the error in the decree, Review Applications Nos. 11 and 12 of 1965 were made for correcting the decree.
This Court granted the applications and modified the decree on 13th September 1965.
The Government taking its clue from the judgment of this Court which invalidated section 6 notification on the ground that the acquisition having been made for the benefit of a Corporation, though for public purpose, is bad because no part of the compensation is to come out of the public revenue and provisions of Part VII of the Land Acquisition Act have not been complied with, decided as per its letter dated 22nd August 1966 to contribute Re. 1/ , which was subsequently raised to Rs. 500/ towards payment of compensation.
The Government, however, felt that as long time has elapsed since the earlier report under section 5A was submitted by the Collector, a fresh enquiry should be made Accordingly the Additional Special Land Acquisition Officer issued a notice dated 1st August 1966 intimating to the respondents that if they so desired the may submit their further objections by or before 16th August 1966.
Complying with this notice the respondents submitted further objections on 31st August 1966 and they were also given a personal hearing.
After examining the report submitted by the enquiry officer the Government of Gujarat issued a notification under section 6 on 10th October, 1967.
The respondents questioned the validity and legality of this notification in the petition filed by them on 14th February, 1968.
Respondents questioned the validity of the impugned section 6 notification on the only ground that it was issued more than 15 years after the date of section 4 notification and thus it had been issued after an unreasonable delay and it was illegal and void.
While this was the only contention which found favour with the High Court, in reaching this conclusion the High Court, after taking note of the fact that there was no express provision in the Act requiring that the notification under section 6 must be issued within a reasonable time after issue of section 4 notification, primarily relied upon the postulate that every statutory power must be exercised reasonably, a doctrine too finally entrenched in our jurisprudence to brook any refutation which would assist in raising the implication that section 6 notification must follow within a reasonable time 910 after issue of section 4 notification.
The Court also drew support from the scheme of sections 4, 5A and 6 as well as the history of the legislation.
On behalf of the appellants it was pointed out to the High Court that in view of the provisions contained in sub section
(2) of section 4 of the Land Acquisition (Amendment and Validation) Act, 1967 ( 'Amendment Act ' for short), as well as the proviso to section 6(1) also introduced by the same amendment Act the situation as has arisen in this case is not likely to arise and the apprehended mischief is not likely to be committed in future and, therefore, the Court should not go in search of the fetters on the power of the Government to issue section 6 notification, in the absence of any express provision, by implication that statutory power must be exercised within a reasonable time.
It was further submitted on their behalf that once the legislature has clearly permitted a thing to be done within the time specified in the statute it would be impermissible by a process of interpretation to reduce the statutory period by implying a further fetter on the power of the Government and that would be the effect if the contention on behalf of the respondents was accepted.
In other words, as the legislature has now provided that in respect of a notification issued under section 4 before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, no declaration under section 6 shall be made after the expiry of two years from the commencement of the aforesaid Ordinance, and futher that in case of section 4 notification issued after the commencement of the Ordinance a statutory limit of three years is fixed within which declaration under section 6 can be made, the apprehended arbitrary exercise of power is thwarted and the Court should not further restrict or curtail the power of the Government to issue notification under section 6 within the time prescribed by the statute.
The High Court was of the opinion that if the power to make a declaration under section 6 is exercised after an unreasonable delay from the date on which notification under section 4 is issued such exercies of power would be invalid and accordingly struck down the notificatio under section 6.
Hence these two appeals.
A preliminary objection was raised by the learined counsel for the respondents in both the appeals contending that as the appellants in both the appels failed to seek within the prescribed time substitution of the heirs and legal representatives of respondent 5 who died on 8th March, 1970 during the pendency of the appeal in this Court, in the circumstances of the case these appeals would abate as a whole.
Undoubtedly, respondent 5 who is described in the cause title of the Memos.
of Appeals as "Ramesh Ramjibhai, Manager, Ramesh Restaurant, a joint hindu family business", died on 8th March 1970.
what 911 appears to have happened thereafter is that applications were made by the appellants under Order 22, Rule 10, Code of Civil Procedure, for bringing Shri Krishnakant Ramjibhai, Manager of Ramesh Restaurant, a joint hindu family business, on record in place of deceased respondent 5.
According to the appellants the deceased respondent 5 had filed the original petition in his capacity as manager of joint hindu family business and on his death as the interest devolved upon the succeeding manager of the joint hindu family business, applications under order 22, rule 10, C.P.C. were made to bring the person on record on whom the interest devolved pending the appeal.
Mr. D. V. Patel took serious exception to the procedure adopted by the appellants and there is some merit in this criticism.
In fact, when Ramesh Ramjibhai who filed the initial petition in his capacity as karta of the undivided hindu family business died during the pendency of the appeal, proper applications should have been made by the appeal, proper applications should have been made by the appellants under O. 22, r. 4, to substitute heirs of Ramesh Ramjibhai who was respondent 5 in the appeals before this Court.
In case of death of a party to a proceeding who is joined in his capacity as karta of an undivided hindu family, if the undivided hindu family continues to be in existence the succeeding karta can be substituted for the deceased karta of the family and that would be sufficient compliance with Order 22, r. 4.
What appears to have been done is to make applications under O. 22, r. 10 and those applications appear to have been granted subject to just exceptions.
The applications appear to have been made after the prescribed period of limitation, and in order to avoid seeking condonation of delay for setting aside abatement, O 22, r. 10 appears to have been invoked.
Mr. Patel is right in saying that this was a device but in any event if proper applications were made under O. 22.
r. 4 the gentleman who became the karta of the undivided hindu family after the death of the former karta could have been substituted on record for the deceased respondent 5.
In any event, succeeding karta of the undivided hindu family having been brought on record though not strictly in accordance with law, we do not propese to give any importance to this technical objection and overrule the same.
In a decision inter partes, Valjibhai 's case, (supra) this Court struck down the first section 6 notification issued on 14th August 1953 on the ground that the acquisition being for the benefit of a Corporation, though for a public purpose, was bad because no part of the compensation was to come out of the public revenue and the provisions of Part VII of the Act had not been complied with.
It would appear that section 4 notification was issued on 10th October 1952 and within less than one year, after completing the enquiry under section 5A and the 912 examination of the report by the appropriate Government, section 6 notification was issued on 4th August 1953.
By any yard stick it could not have been said that there was delay, much less an unreasonable delay, in making the necessary declaration under section 6 after the issue of the notification under section 4.
The chronology of events that followed in the wake of issuance of a notification under section 6 dated 14th August 1953 would wholly exonerate the Government of any charge of dithering or dilatoriness or inaction.
These events be noticed now so as to appreciate the submission on behalf of the appellants that they cannot be accused of any inaction, deliberate dilatoriness or dithering.
Soon after the issue of the notification under section 4 dated 10th October 1952 and even before the declaration was made under section 6 as per notification dated 14th August 1953 the respondents filed Civil Suit No. 1262/53 challenging the notification under section 4 and sought an injunction restraining the then State of Bombay from proceeding with the acquisition of the lands in possession of the respondents.
An interim injunction was sought but the same was refused.
Thereafter came the notification under section 6 dated 14th August 1953.
It appears that thereafter the respondents amended the plaint to add a relief for quashing and setting aside the notification under section 6 also.
It would thus appear that whatever was required to be done by the Government for completing the proceedings of acquisition was undertaken and finished within a period of less than one year from the date of the notification under section 4.
The suit filed by the respondents was dismissed by the trial court as per its judgment dated 28th January 1959.
Both the notifications were held valid and they were not found to suffer from any infirmity as contended for and on behalf of the respondents.
The respondents carried the matter in appeal to the District Court and this appeal was dismissed by the first appellate court as per its judgment dated 28th September 1959.
The respondents preferred second appeal to the High Court but failed to carry conviction with the High Court, with the result that the appeal failed and was dismissed on 1st August 1960.
The respondents did not rest content with the dismissal of their second appeal and applied for and obtained special leave of this Court under article 136 of the Constitution.
The appeal of the respondents by special leave succeeded as per judgment rendered by this Court on 8th May 1963.
The question is whether there was any delay much less unreasonable delay on the part of the State Government in taking follow up action after issuing notification under section 4.
The State Government had actually taken the follow up action expeditiously within less than a year when on 14th August 1953, section 6 notification was issued.
Even 913 before section 6 notification was issued the respondents filed the suit and went on preferring appeals.
They succeeded for the first time in this when this Court allowed their appeals on May 8, 1963.
Till then the Government could not be accused of any inaction or delay in taking the follow up action.
What was the Government expected to do during the time the respondents went on preferring successive appeals ? Was the Government expected, even though it succeeded in the trial court and first and second appellate courts to foresee in advance that at some stage by some court in the pyramid of appeals its notification under section 6 would be found to be ineffective and forestall such a decision by issuing another section 6 notification ex major cautela ? If the Government succeeded in three courts and was assured by three courts that both its notifications under sections 4 and 6 were valid and effective, it is difficult to appreciate the observation of the High Court that when the Government issued the first section 6 notification it was ineffective exercise of power under section 6 and the Government wrongly went on contending that it was a valid exercise of power.
This criticism is not well merited.
There would have been some legitimacy in this criticism of the stand of the Government if the Government had lost in the first court and went on filing successive appeals even if each court went on holding the notification ineffective.
The reverse is the position.
The Government went on succeeding and the courts went on upholding the notification.
There was no alternative with the Government but to go on defending its action before the courts to which it was dragged by the respondents after their successive failures.
In this background the question was posed by the High Court: Can the Government then contend, when it is found to be wrong by the highest court in the land, that the delay in the exercise of the power under section 6 occasioned by its own wrong stand should be regarded as reasonable ? and answered by it by saying that if the Government had not persisted in wrongly asserting the validity of the first section 6 notification and accepting its invalidity, had cancelled it, the delay in the effective exercise of the power under section 6 could have been avoided.
This answer is unfortunately not borne out by the events succeeding the issuance of the first section 6 notification.
Not only the Government stand was not found to be wrong but by three courts it was found to be correct.
It is this Court in the last appeal found section 6 notification invalid.
Could the Government be expected to speculate in advance that ultimately it may fail to convince this Court though it had convinced three other courts and, therefore, right at the time of institution of the suit in the court, concede the contention of the respondents and cancel the first section 6 notification and issue a second one ? There was no guarantee that the second one would not have been challenged and obviously there was 914 no assurance that some defect may not be found by some court even in the second section 6 notification.
The Government cannot be put on the horns of a dilemma.
Therefore, we find it difficult to agree with the High Court that having adopted a wrong stand and thus taken about 11 years the Government cannot now be permitted to urge that the delay so occasioned should not be regarded as unreasonable.
In fact the Government had practically little or no option but to support the decisions of the Courts which were in its favour till this Court for the first time found some defect in its notification under section 6.
Any other view may lead to a starting result that every litigant before it can explain the delay on the ground of being led from court to court must foresee a possible error that the hierarchy of courts may at some stage notice and rectify its stand in advance.
It would be nothing short of a speculative approach which may ill suit any litigant and more so the Government.
The High Court was further of the opinion that even if there was some explanation for the delay from 14th August 1953 to 8th May 1963, there was no explanation for the delay in making the review application in the beginning of 1965 before the Supreme Court and that this period of one year and 9 months remains totally unexplained.
In this context it may be advantageous to state that the respondents in the earlier round of litigation had challenged both the notifications under sections 4 and 6 had lost before the first three courts.
This Court while allowing the appeal by its judgment dated 8th May 1963 passed the final order as under: "We, therefore, allow the appeals and decree the suits of the appellants with costs in all the Courts.
" Literally implemented, the decretal portion would mean that both section 4 and section 6 notifications were struck down.
Reading the body of the judgment it clearly transpires that this Court upheld the validity of the notification under section 4.
When this inconsistency between the judgment and the decree came to the notice of the Government, Review Petitions Nos. 11 and 12 of 1965 appear to have been filed in the year 1965, and these petitions were allowed by this Court as per its order dated 13th September 1965 by deleting the decretal portion of the judgment as extracted hereinabove and substituting it in the following words: "and decree the suit for permanent injunction restraining the respondents from proceeding further with the land acquisition proceedings under the said notification issued under section 6(1) of the Act with costs in all the courts".
915 The High Court was of the opinion that the Government took a long time of one year and 9 months in ascertaining this inconsistency between the decretal portion of the judgment and the main body of the judgment and there was delay in moving the review applications.
In this connection a reference to the affidavit of Mr. D. K. Motwani, Secretary to the Gujarat State Road Transport Corporation for whose benefit the acquisition was made, as well as the affidavit of Shri section R. Pardhan, Under Secretary to Government of Gujarat, would show that after the copy of the judgment was received and it was examined to ascertain what further steps were required to be taken to complete the process of acquisition consistent with the judgment of the Supreme Court, the error was discovered and then the learned advocate was instructed to file review applications.
This delay of a year and few months in the context of the facts in this case cannot be said to be unreasonable.
The third stage where the High Court found the delay in taking the follow up action was after the grant of review application and before the impugned notification dated 10th October 1967 was issued.
This Court allowed the review applications on 13th September 1965.
Thereafter the Government directed a fresh enquiry under section 5A.
This was done in fairness to the respondents, though Mr. D. V. Patel learned counsel for the respondents was rather critical of this fairness of the Government inasmuch as he said that there was no necessity for a fresh enquiry.
Earlier enquiry under section 5A was in 1952.
By this time nearly 15 years had elapsed since the enquiry.
If the Government in the backdrop of these facts considered it fair and just to order a fresh enquiry to give the respondents an opportunity to file fresh objections, the Government cannot be accused of dithering or whiling away precious time on what was described as a futile exercise.
This second enquiry under section 5A was held after giving an opportunity as per notice dated August 1966, to file objections which in fact were filed on August 31, 1966, and then a notice dated 30th December 1966 was served upon the respondents calling upon them to appear for personal hearing on 12th January 1967.
The enquiry was adjourned at the request of the respondents 9 times as set out in the affidavit of Shri section R. Pardhan.
The enquiry was over on 13th April 1967.
During the course of personal hearing the respondents appeared through their advocates Sarvashri K. M. Vyas, A. L. Shah, V. R. Bhatt and N. D. Pandey.
The last of the submissions appear to have been made on 13th April 1967.
Thereafter the enquiry officer submitted his report and the Government took the prompt action of issuing the impugned notification on 10th October 1967.
Even here the High Court found a further unexplained delay after 13th September 1965 till 10th October 916 1967 when the impugned notification was issued.
The High Court possibly overlooked the affidavit of Shri section R. Pradhan when it observed that there was no satisfactory answer to the question posed by it, in the affidavit filed on behalf of the respondents.
With respect, it is not possible to subscribe to this view of the High Court in view of the facts clearly set out hereinabove.
It, therefore, unmistakably transpires that in the facts and circumstances of this case there was no delay, though apparently there appears a time lag of nearly 15 years between section 4 and section 6 notifications because the events in the interregnum clearly made it impossible for the Government to issue a second section 6 notification when it had already issued a first section 6 notification within a period of less than one year from the date of the issue of the section 4 notification and the validity of which was beyond reproach till May 6, 1963.
Assuming that the High Court was right in rejecting the explanation preferred by the Government for the delay in issuing the second section 6 notification, would it still be fair to hold that there was an unreasonable delay in issuing the second section 6 notification in view of the specific provision contained in sub section
(2) of section 4 of the 1967 Amendment Act which provides that notwithstanding anything contained in clause (b) of sub section
(1), no declaration under section 6 of the principal Act in respect of any land which has been notified before the commencement of the Land Acquisition (Amendment & Validation) Ordinance, 1967, under sub section
(1) of section 4 of the principal Act, shall be made after the expiry of two years from the commencement of the Ordinance.
The Ordinance came into force on 20th January 1967.
Simultaneously a proviso was added to sub section
(1) of section 6 in the following terms: "Provided that no declaration in respect of any particular land covered by a notification under section 4 sub section
(1) published after the commencement of the Land Acquisition (Amendment & Validation) Ordinance, 1967, shall be made after the expiry of three years from the date of such publication".
A combined reading of the provisions contained in sub section
(2) of section 4 with the one contained in the proviso to sub section
(1) of section 6 introduced by the Amendment Act would clearly put an end to the unsatisfactory situation which troubled the High Court in this case.
In view of the statutory provision noticed herein the Government would be precluded from making a declaration under section 6 after the expiry of a period of three years from the date of the issue of a notification under section 4 which may be issued after the Amendment Act came into force.
And in respect of those section 4 notifications which were issued perior to the 917 commencement of the Ordinance hereinabove noted on 20th January 1967 any notification which is required to be issued under section 6 must be made within a period of two years whereafter as a necessary corollary all section 4 notifications issued prior to 20th January 1967 would stand exhausted and would not provide either a source or reservoir for issuing section 6 notification.
Consequently the mischief sought to be set at naught by the High Court by reading by necessary implication in the scheme of sections 4, 5A and 6 the concept of exercise of statutory power within a reasonable time has been statutorily remedied.
The apprehensions of the High Court that if not checkmated by implying that such statutory power must be exercised within a reasonable time to curb arbitrary exercise of power to the detriment of a citizen have been taken note of by the legislature and fully met.
Absence of any decided case on the subject of which High Court took note could not permit an inference as has been done by the High Court that in the absence of a decided case the legislature would not remedy the possible mischief.
Legislature often does take note of a possible abuse of power by the executive and proceed to nip it in the bud by appropriate legislation and that has been done in this case.
There is now no more possibility of a gap of more than three years between section 4 and section 6 notifications because any declaration made after the expiry of a period of three years from the date on which section 4 notification is issued would be invalid as being beyond the prescribed period.
These newly inserted provisions were brought to the notice of the High Court.
Now, as pointed out earlier, the Ordinance came into force on 20th January 1967.
The notification under section 4 in this case was prior to the commencement of the Ordinance.
Therefore, the provision contained in sub section
(2) section 4 of the 1967 Amendment Act would be directly attracted.
The Government could, therefore make a declaration within a period of two years from 20th January 1967.
The Government has in fact issued the impugned notification under section 6 on 10th October 1967, i.e. within the period prescribed by the statute.
The question then is: when a statute confers power and prescribes time within which it can be exercised, could it ever be said that even though the power is exercised within the statutory period yet the Court can examine the question of delay and record a finding that there was an unreasonable delay in exercise of the power and, therefore, the exercise of power is bad ? This approach would defeat the very purpose for prescribing a sort of a period of limitation on exercise of power.
When a period is prescribed for exercise of power it manifests the legislative intention that the authority exercising the power 918 within the prescribed time could not at least be accused of inaction or dithering and, therefore, such exercise of power could not be said to be bad or invalid on the only ground that there was unreasonable delay in the exercise of the power.
The very prescription of time in heres a belief that the nature and quantum of power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable and, therefore, exercise of power within that time could not be negatived on the only ground of unreasonable delay.
Therefore, in this case it is difficult to agree with the High Court that there was an unreasonable delay in exercise of power and hence the exercise was either bad or invalid.
The High Court by implication read a fetter on the power of the Government to issue section 6 notification within a reasonable time after the issue of section 4 notification after observing that there was no express provision that such power ought to be exercised within a reasonable time.
In raising this implication the High Court took into account the postulate that every statutory power must be exercised reasonably and a reasonable exercise of power implies its exercise within a reasonable time.
Coupled with it two other factors were taken into consideration such as the effect of issuing a section 4 notification on the rights and obligations of the owner of the land whose land is proposed to be acquired; the right of the Government to unilaterally cancel section 4 notification in the event of falling prices; history of legislation; and delayed issue of section 6 notification would deny adequate compensation to the owner.
But by the time the High Court examined this matter the legislature had already introduced a provision by which the power to issue section 6 notification was to be exercised within the prescribed period of time.
At that stage there hardly arose a question of a search of the fetter on the power of the Government ignoring to some extent the express statutory provision.
Therefore, while appreciating the anxiety of the High Court we are of the opinion that once the legislature stepped in and prescribed a sort of period of limitation within which power to issue notification under section 6 could be exercised it was not necessary to go in search of a further fetter on the power of the Government by raising the implication.
It thus appears to be satisfactorily established that the impugned section 6 notification was issued within the prescribed period introduced by the 1967 Amendment Act and, therefore, could not be struck down on the only ground that the power to issue second section 6 notification was exercised after an unreasonable and unexplained delay.
This being the only infirmity found by the High Court to which we are not able to 919 subscribe, it must be held that the second section 6 notification dated 10th October 1967 is valid and legal.
Accordingly both these appeals succeed and are allowed and the decision of the High Court is set aside and Special Civil Application No. 729/68 filed by the respondents is dismissed but in the circumstances of the case, with no order as to costs.
S.R. Appeals allowed.

summary:
A suit (No. 1262/53) Challenging the notification under Section 4 of the Land Acquisition Act dated 10 10 1952 issued by the former Government of Bombay and later another notification under Section 6 of the Act dated 14 8 1953 (issued during the pendency of the suit), notifying that the final plots Nos. 41.
42 and 43 were required for public purpose viz. State Transport was dismissed by the Trial Court on 28 1 1959.
The first and the second appeals having failed, the respondents came up to this Court.
This Court in its decision inter partes, Valji Bhai 's case struck down Section 6 notification on the ground that the acquisition being for the benefit of a Corporation, though for a public purpose was bad beeause no part of the compensation was to come out of the public revenue and the provisions of Part VII of the Act had not been complied with.
After the bifurcation of the erstwhile State of Bombay, the land acquisition proceedings came within the cognizance of Gujarat State.
The State by its letter dated 22 8 1966 decided to contribute towards compensation a sum of Re. 1/ which was subsequently raised to Rs. 500/ .
The Government felt that as long time has elapsed since the earlier report under Section 5A was submitted by the Collector, a fresh enquiry should be made.
Accordingly the Additional Special Land Acquisition Officer issued a notice dated 1 8 1966 intimating to the respondents that if they so desired they might submit their further objections on or before 16 8 1966.
Complying with this notice, the respondents submitted further objections on 31 8 1966 and they were also given a personal hearing.
After examining the enquiry report submitted by the enquiry officer the Government of Gujarat issued a notification under Section 6 on 10 10 1967.
The respondents questioned the validity and legality of this notification in the writ petition filed by them on 14 2 1968 on the only ground that it was issued more than 15 years after the date of Section 4 notification.
The High Court was of the opinion that if the power to make a declaration under Section 906 6 is exercised after an unreasonable delay from the date on which notification under Section 4 is issued such exercise of power would be invalid and it accordingly struck down the notification under Section 6 of the Act.
Hence the two appeals one by the State of Gujarat and the other by the Gujarat State Road Transport Corporation.
Allowing the appeals by certificate, the Court ^ HELD: 1.
The impugned section 6 notification was issued within the prescribed period introduced by the 1967 Amendment Act and, therefore could not be struck down on the only ground that the power to issue second section 6 notification was exercised after an unreasonable and unexplained delay.
Section 6 notification, dated 10th october 1967, therefore is valid and legal.[918G H, 919A] 2.
A combined reading of the provisions contained in sub section (2) of Section 4 with the one contained in the proviso to sub section (1) of Section 6 introduced by the Land Acquisition (Amendment and Validation) Act, (Central Act 13 of 1967) with effect from 20 1 1967 would make it clear that the Government would be precluded from making a declaration under section 6 after the expiry of a period of three years from the date of issue of a notification under Section 4 which may be issued after the Amendment Act came into force.
And in respect of those section 4 notifications which were issued prior to the commencement of the Ordinance i.e. 20 1 1967, any notification which is required to be issued under section 6 must be made within a period of two years whereafter as a necessary corollary all section 4 notifications issued prior to 20th January 1967 would stand exhausted and would not provide either a source of reservoir for issuing section 6 notification.
Consequently the mischief sought to be set at naught by the High Court by reading by necessary implication in the scheme of sections 4, 5A, and 6 the concept of exercise of statutory power within a reasonable time has been statutorily remedied.
The apprehensions of the High Court that if not checkmated by implying that such statutory power must be exercised within a reasonable time to curb arbitrary exercise of power to the detriment of a citizen have been taken note of by the legislature and fully met.
Absence of any decided case on the subject of which High Court took note could not permit an inference as has been done by the High Court that in the absence of a decided case the legislature would not remedy the possible mischief.
Legislature often does take note of a possible abuse of power by the executive and proceed to nip it in the bud by appropriate legislation and that has been done in this case.
There is now no more possibility of a gap of more than three years from the date on which section 4 notification is issued, otherwise it would be invalid as being beyond the prescribed period.
[916 G H, 917 A D] In the instant case, the notifications under section 4 was prior to the commeneement of the ordinance.
Therefore, the provision contained in sub section (2) of section 4 of the 1967 Amendment Act would be directly attracted.
The Government could, therefore, make a declaration within a period of two years from 20th January 1967.
The Government has in fact issued the impugned notification under section 6 on 10th October 1967 i.e. within the period prescribed by the Statute.
[917 E F] 907 3.When a period is prescuibed for exercise of power it manifests the legislative intention that the authority exercising the power within the prescribed time could not at least be accused of inaction or dithering and, therefore, such exercise of power could not be said to be bad or invalid on the only ground that there was unreasonable delay in the exercise of the power.
The very prescription of time inheres a belief that the nature and quantum of power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable and, therefore, exercise of power within the time could not be negatived on the only ground of unreasonable delay.
[917H, 918 A B] Therefore, in this case, there was no unreasonable delay in exercise of power and hence the exercise was neither bad nor invalid.
[918B] 4.
Once the legislature stepped in and prescribed a sort of limitation within which power to issue notification under section 6 could be exercised, it was not necessary to go in search of a further fetter on the power of the Government by raising the implication.
[918F G] In this case, the High Court by implication read a fetter on the power of the Government to issue section 6 notification within a reasonable time after the issue of section 4 notification after observing that there was no express provision that such power ought to be exercised within a reasonable time.
In raising this impliccation the High Court took into account the postulate that every statutory power must be exercised reasonably and a reasonable exercise of power implies its exercise within a reasonable time.
Coupled with it two other factors were taken into consideration such as the effect of issuing a section 4 notification on the rights and obligations of the owner of the land whose land is proposed to be acquured; the right of the Government to unilaterally cancel section 4 notification in the event of fall in prices; history of legislation; and delayed issue of section 6 notification would deny adequate compensation to the owner.
But by the time the High Court examined this matter the legislature had already introduced a provision by which the power to issue section 6 notification was to be exercised within the prescribed period of time.
At that stage there hardly arose a question of a search of the fetter on the power of the Government ignoring to some extent the express statutory provision.
[918C F] 5.
In the case of death of a party to a proceeding who is joined in his capacity as Karta of an undivided Hnndu family, if the undivided Hindu family continues to be in existence the succeeding Karta can be substituted for the deceased Karta of the family and that would be sufficient compliance with Order XXII Rule 4 of C.P.C. [911D E] In the insant case an application made under Order XXII Rules 10 C.P.C. made after the prescribed period of limitation and in order to avoid seeking condonation of delay for setting aside abatement is not correct.
[911E] [The Court, however, overruled the objection on this ground since the L.rs.
have already been substituted].


judgement:
Civil Appeals Nos.
27l6 27l8 of 1972 Appeals by Special Leave from the Judgment and Order dated the 14 7 1972 of the Kerala High Court in income Tax Reference Nos. 100, 101 and 102 of 1970 WITH CIVIL APPEAL NOS.
365 367 of 1978.
From the Judgment and order dated the 24th May, 1977 of the Kerala High Court in I.T.R. Nos.
55, 56 and 57 of 1975 J. L. Nain and Mrs. Saroja Gopalakrishnan for the Appellant in all the appeals.
P. J. Francis, section P. Nayar and Miss A. Subhashini for Respondent in all the appeals.
The Judgment of the Court was delivered by UNTWALIA J.
These six appeals have been heard together as a common question of law in relation to the assessment of the same assessee arises in them.
Civil Appeals 2716 2718 of 1972 relate to the assessment years 1964 65, 1965 66 and 1966 67.
The assessee appellant is a registered firm carrying on business at several places in the State of Kerala.
Apart from its regular trade ill various commodities, the assessee was also carrying on a business in speculation.
Apropos the speculation business of the assessee the Income Tax officer determined a loss of Rs. 40,510/ ; a loss of Rs. 598/ and a profit of Rs. 1,36,264/ for the assessment years 1964 65, 1965 66 and 1966 67 respectively.
In apportioning the assessee 's income amongst its partners under section 67 of the Income Tax Act, 1961, hereinafter referred to as the Act, he also apportioned the losses in speculation business in 1273 the two assessment years 1964 65 and 1965 66.
The profit in speculation business as computed for the assessment year 1966 67 was also apportioned by the Income Tax officer amongst the partners.
The assessee contended before the Income Tax officer that the losses in the speculation business could not be apportioned between the partners but should be carried forward and set off against the profit in the said business made in the assessment year 1966 67.
The Income Tax Officer rejected this contention.
But the Appellate Assistant Commissioner in appeal following the decision of this Court in Commissioner of Income Tax, Gujarat vs Kantilal Nathuchand Samt accepted the assessee 's stand.
The department took the matter in second appeal before the Income Tax Appellate Tribunal.
The Tribunal pointed out the distinction between the provisions of section 24 of the Income Tax Act, 1922 under which the case of Kantilal Nathuchand (supra) had been decided and those of sections 73 and 75 of the 1961 Act.
It, therefore, allowed the department 's appeal.
On being asked by the assessee to state a case and make a reference to the High Court, the Tribunal referred the following question of law for its opinion: "Whether, on the facts and in the circumstances of the case, and on a true interpretation of the various provisions of the Income tax Act, 1961, the Tribunal was correct in holding that a registered firm was not entitled to have its losses in speculation business carried forward for set off against future profits in speculation business." The High Court of Kerala on a consideration of the relevant provisions of the Act contained in Chapter VI has answered the reference in favour of the Revenue and against the assessee.
The decision of the High Court is reported in M.D. Kevasia & Co. vs Commissioner of Income Tax, Kerala.
Civil Appeals 2716 to 2718 of 1972 have been filed in this Court by special leave.
Identical questions arose in respect of the assessment years 1967 68, 1968 69 and 1969 70.
The High Court answered the references made in respect of those three years also against the assessee by its judgment and order dated the 24th May, 1977.
Civil Appeals 365 to 367 of 1978 have been preferred from the said decision of the High Court.
1274 In the case of Kantilal Nathuchand (supra) the question for con sideration was whether on a true interpretation of the various provisions of the Indian Income Tax Act, 1922 speculation losses of the assessee firm for the assessment years 1958 59 and 1959 60 should be set off against its speculation profit in its assessment for the assessment year 1960 61.
The provisions contained in section 2 (1) and the two provisos appended thereto were not very clear and some apparent conflict arose between the first and the second proviso.
On a consideration of the same this Court held that speculation losses of a registered firm kept apart under the first proviso to section 24(1) in computing its total income for one year could not be apportioned between the partners, and the registered firm could claim to carry for ward such.
losses and have it set off against speculation profits of the firm of a later year in accordance with section 24(2).
But the provisions of law contained in Chapter VI of the Act have made a considerable departure from the corresponding provisions of the 1922 Act.
In these cases we are only concerned with the question of set off of speculation losses against the profits of a other speculation business.
In this connection it would suffice to read only the relevant provisions of sections 73 and 75 as they stood at the relevant time.
They are as follows: "73.
Losses in speculation business (1) Any loss, computed in respect of a speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation business (2) Where for any assessment year any loss computed in respect of a speculation business has not been wholly set off under sub section (1), so much of the loss as is not so set off or the whole loss where the assessee had no income from any other speculation business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and (i) it shall be set off against the profits and gains, if any, of any speculation business carried on by him assess able for that assessment year; and (ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on." 75.
Losses of registered firms (1) Where the assessee is a registered firm, any loss which cannot be set off against 1275 any other income of the firm shall be apportioned between the partners of the firm, and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under sections 70, 71, 72, 73 and 74.
(2) Nothing contained in sub section (1) of section 72, sub section (2) of section 73 or sub section (1) of section 74 shall entitle any assessee, being a registered firm, to have its loss carried forward and set off under the provisions of the aforesaid sections.
" On reading the above provisions of section 73 it is manifest that the assessee 's loss in speculation business cannot be set off except against profits and gains, if any, of another speculation business.
For the purpose of set off it is permissible to carry forward the losses to the following assessment year or years subject to the limit of 8 years as provided in sub section (4) of section 73.
But it is to be noticed that the provision contained in sub section (2) is "subject to the other provision of this Chapter", which includes section 75.
In the latter section it is clearly provided that where the assessee is a registered firm, for the purpose of set off and carry forward of the loss apportionment between the partners of the firm has got to be made and they alone are entitled to have the amount of the loss set off and carried forward for set off under section 73.
The matter is put beyond any pale of doubt and challenge in sub section (2) of section 75 when it says that nothing contained in sub section (2) of section 73 shall entitle a assessee, being a registered firm, to have its loss carried forward and set off under the provisions of section 73(2).
The Tribunal and the High Court, therefore, were right in holding that the ratio of the decision of this Court in Kantilal Nathunchand 's case (supra) cannot be applied in respect of the assessment made under the Act.
Identical views have been expressed by the High Court of Gujarat in Commissioner of Income Tax, Gujarat III vs Dhanji Shamji(1) and the High Court of Punjab and Haryana in Choudhary Cotton Ginning and Pressing Factory vs Commissioner of Income Tax, Punjab.
( 2) For the reasons stated above, we dismiss all the appeals with costs.
Hearing fee one set only.
V.D.K. Appeals dismissed.

dataset_name: IN-Abs

summary:
The assessee appellant is a registered firm carrying on business at several places in the State of Kerala.
Apart from its regular trade in various commondities, the assessee was also carrying on a business in speculation.
In respect of the losses during the assessment years 1964 65, 1965 66 and the profit during the assessment year 1966 67, the Income Tax Officer apportioned the aforesaid losses and profits amongst the partners and rejected the assessee 's contention that the losses in speculation business should be carried forward and set off against the profit in the said business made in the assessment year 1966 67.
But the Appellate Assistant Commissioner, following the decision of this Court in C.I.T., Gujarat vs Kantilal Nathuchand Sami, accepted the assessee 's stand.
The Tribunal on second appeal answered in favour of the Revenue and the High Court also answered the reference against the assessee.
Dismissing the appeals by special leave the Court, ^ HELD :1.
The case of Kantilal Nathu Chand was decided on a true interpretation of Section 24(1) of the Income Tax Act 1922 and the two provisions appended thereto.
But the provisions of law contained in Chapter VI of the 1961 Act have made a considerable departure from the corresponding provisions of the 1922 Act.
[1274A, B D] It is clear from the provisions of Section 73 of the 1961 Act that the assessee 's loss in speculation business cannot be set off except against profits and gains, if any, of another speculation business.
[1275B] 2.
For the purpose of set off it is permissible to carry forward the losses to the following assessment year or years subject to the limit of eight years as provided in Section 73 of the 1961 Act.
[1275C] 3.
The provision contained in Sub section (2) of Section 73 of the 1961 Act is "subject to the other provisions of this Chapter", which includes section 75.
Under section 75 where the assesee is a registered firm, for the purpose of set off and carry forward of the loss apportionment between the partners of the firm has got to be made and they alone are entitled to have the amount of the loss set off and carried forward for set off.
The matter is put beyond any 1272 pale of doubt and challenge in sub section (2) of section 75 when it says that nothing contained in sub section (2) of section 73 shall entitle any assessee, being a registered firm to have its loss carried forward and set off under the provisions of Section 73(2).
[1275D E] C.I.T., Gujarat vs Kantilal Nathu Chand, 1 SCR 813; distinguished.
C.I.T., Gujarat III vs Dhanji Shamji, Chowdary Cotton Ginning and Processing Factory vs C.I.T., Punjab 109, I.T.R. p. 6; approved.
M. G. Devasia & Co. vs C.I.T., Kerala, ; affirmed.


judgement:
s Nos.
604,605, 647 649) 663, 671 and 692 of 1954.
Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights.
30 section P. Sinha, (B. Patnaik, with him) for the petitioners in P. Nos. 604, 605, 649 and 663 of 1954.
M. C. Setalvad, Attorney General of India, (Porus A Mehta and P.G. Gokhale., with him) for the respondents in all the Petitions.
January 20.
The Judgment of the Court was delivered by BHAGWATI J.
These petitions under article 32 of the Constitution are filed by the owners of Stage Carriage Services plying their buses on several routes in the districts of the State of Orissa impugning the provisions of Orissa Act XXXVI of 1947 and Orissa Act I of 1949 as violative of their fundamental rights.
They raise a common question of law and can be disposed of by one judgment.
The State of Orissa embarked upon a scheme of Nationalised State Transport and, as a first step towards it, enacted an Act styled the Orissa Motor Vehicles (Regulation of Stage Carriage and Public Carrier 's Services) Act, 1947 (Orissa Act XXXVI of 1947), which modified the provisions of the , for the better regulation of Stage Carriage and Public Carrier 's Services in the Province of Orissa.
This Act envisaged the formation of a Joint Stock Company in which the Central and the Provincial Governments shall together have controlling interests for providing in stages or in one stage a more efficient administration of the entire stage carriage and public carrier 's services in the Province of Orissa.
Such a Company was to be authorised to run stage carriage and public carrier 's services in the Province of Orissa to the exclusion of all other persons in the routes and areas over which it extended its activities, and with that end in view, the provisions of the , were modified as therein specified.
Section 4 of the Act provided that the Provincial Government may, if they think fit by notification direct that the powers conferred by the , on a Provincial Transport Authority or Regional Transport Authority shall 31 be held in abeyance with respect to the issue, renewal, suspension or transfer of permits for stage carriage services and public carrier 's services.
Such a notification was to be effective according to the directions either in the whole of the Province or in any specifled area or in respect of any specified route or routes.
On the issue of such a notification, the abovementioned powers conferred on the Provincial Transport Authority or the Regional Transport Authority were to be held in abeyance and all permits issued, renewed or transferred by them were to become inoperative and the Provincial Government alone was to have the power to issue or renew permits or to grant temporary permits or to suspend or to transfer permits for stage carriage services and public carrier 's services.
Whilst the State of Orissa was examining the question of the formation of such a Company, the merger of feudatory States of Orissa with the Province of Orissa took place on the 1st January, 1948.
Some of these Durbars had their own transport services and these were taken over by the State Government of Orissa.
Orissa was then divided into 5 zones for the purpose of proper development of road transport, viz., Sambalpur, Keonjhar, Koraput, Ganjam and Cuttack zones.
It was decided by the Government to nationalise passenger service transport in the first three zones to be run departmentally based on the nucleus services taken over from the feudatory States which had merged.
In order to give, effect to this decision, the Orissa Motor Vehicles (Amendment) Act 1948 (Orissa Act I of 1949) was enacted which further amended the , in the manner therein specified.
Section 1(3) of that Act provided that the remaining provisions of the Act shall come into force in such specified areas of the district or districts as the Provincial Government may by notification from time to time appoint.
The Provincial Government may also by notification withdraw the remaining provisions of the Act from any specified areas.
It Was further provided that on and from the date when the remaining provisions of the Act came into force in any specified areas, the 32 provisions of Orissa Act XXXVI of 1947 shall be repealed in respect of the said specified areas and when the remaining provisions of the Act were withdrawn from any specified areas, the provisions of Orissa Act XXXVI of 1947 shall be deemed to be revived in the said specified areas from the date of publication of the notification of withdrawal.
The effect of these provisions was that in those areas or districts where a notification under section 4(1) of the Orissa Act XXXVI of 1947 was not issued, the provisions of the , continued to apply; where such a notification was issued, the provisions of Orissa Act XXXVI of 1947 came to be applied except where, by virtue of the power reserved under section 1 of Orissa Act I of 1949, the remaining provisions of that Act were brought into force by a notification issued in that behalf, in which case the provisions of Orissa Act XXXVI of 1947 were repealed in respect of the said specified areas and the provisions of Orissa Act I of 1949 becameapplicable.
These were the three distinct sets of circumstances which would prevail at a given time after the enactment of Orissa Act I of 1949 according as the relevant notifications under section 4(1) of Orissa Act XXXVI of 1947 or under section 1(4) of Orissa Act I of 1949 were issued bringing particular area or areas within the operation of the said respective Acts.
Whereas a Joint Stock Company in which the Central and the Provincial Governments were together to have controlling interests was envisaged in Orissa Act XXXVI of 1947, State Transport Service was envisaged in Orissa Act I of 1949 which defined State Transport Service to mean a service in which the Orissa State has entire or partial financial interest and which the Provincial Government may by notifi cation declare to be a State Transport Service for the purposes of the Act.
A Joint Stock Company was accordingly formed in 1950 which was called the Orissa Road Transport Co., Ltd. The Transport Services which were run through the Joint stock Company were termed the "Rationalised Services".
The 33 Services which were run through the State Transport Service were termed the "Nationalised Services".
In pursuance of the above scheme of Nationalised State Transport, the State Government of Orissa issued notifications and press notes which gave intimation to the owners of Stage Carrier Services operating on the several routes within the districts of Orissa that with effect from the 1st January 1955 either the Orissa Road Transport Co., Ltd., or the State Transport Service will be operating the said respective routes.
That was the occasion for the above petitions being filed by the owners of the Stage Carriage Services plying their buses on the said respective routes impugning Orissa Act XXXVI of 1947 and Orissa Act I of 1949 as unconstitutional and void as aforesaid.
The petitions before us are not Confined to the areas and routes where only Rationalised Services or Nationalised Services are contemplated to be introduced by the State Government.
Petitions Nos.
604 of 1954, 648 of 1954,664 of 1954, 666 of 1954 and 671 of 1954 are concerned with the nationalisation of the services and the routes operated upon by the petitioners in those petitions are intended to be served by the State Transport Service.
Petitions Nos.
605 of 1954, 647 of 1954, 649 of 1954, 663 of 1954 and 665 of 1954 are concerned with the rationalisation of the services and the routes operated upon by the petitioners in those petitions are intended to be served by the Orissa Road Transport Co., Ltd. Petition No. 692 of 1954 is not clear whether the scheme to be put into operation by the State Government in the route operated upon by the petitioner therein is intended to be nationalised or rationalised.
One thing, however, is common between all these petitioners that their permits under which they have been operating their buses upon those routes for the last several years are liable to be either terminated or cancelled or are not to be renewed under the scheme of Nationalised Road Transport Services and either the State Government or the Transport Authorities will grant the permits on those routes only to the Orissa Road 5 34 Transport Co. Ltd or the State Transport Service as the case may be.
The provisions of the impugned Acts were attacked on the ground that there was discrimination in favour of the State Transport Service and the Orissa Road Transport Co. Ltd. It was urged that the State could not discriminate against persons in its own favour as well as in favour of the Joint Stock Company formed for carrying on motor transport business as that would be a negation of equality guaranteed under article 14 of the Constitution.
It was also urged that zonal and territorial discrimination in the application of the impugned Acts arbitrarily offended against article 14 of the Constitution.
A further ground of, attack was that the said provisions of the impugned Acts and the rules framed thereunder infringed article 19(1)(f) and (g) of the Constitution as they put restrictions on the citizens regarding their rights to hold property and to practice trade or business.
Article 31(2) was also alleged to have been infringed because the Gazette Notification of the State of Orissa purporting to take away the petitioners motor transport business amounted to confiscation and the inte rests of the petitioners in a commercial undertaking were purported to be acquired without making any provisions for compensation.
The impugned Acts, it was alleged, also violated the guarantee of freedom of inter State and intra state trade embodied in article 301 of the Constitution.
Our attention was drawn to the relevant provisions of the , Orissa Act XXXVI of 1947 and Orissa Act I of 1949 regarding the issue and renewal of permits.
Under the , the Provincial Transport Authority and the Regional Transport Authority were invested with the requisite powers in this behalf.
Sections 47 and 55 prescribed the matters to be considered by the Regional Transport Authority in considering applica tions for stage carriage permits and public carrier 's permits and section 58 provided for the duration and renewal of permits.
So far as renewals of permits were concerned, it was provided that, other conditions 35 being equal, applications for renewal shall be given preference over new applications for permits.
When a notification was issued under section 4(1) of Orissa Act XXXVI of 1947, the powers conferred on the Provincial Transport Authority or the Regional Transport Authority by the , were held in abeyance and the Provincial Government alone was invested with the power to issue or renew permits.
In the granting or refusing to grant such permits, the Provincial Government was not bound to take into consideration the matters specified in sections 47 or 55 of the .
The Provincial Government was also authorised by notification to cancel any permit granted under the , without following the provisions of section 60 of that Act.
The only provision which was made in section 6 of Orissa Act XXXVI of 1947 in this behalf was that when a permit became inoperative under section 4(2) or was cancelled under section 5 of that Act, compensation as therein prescribed was payable to such permit holder.
Sections 3 and 4 of Orissa Act I of 1949 added two further clauses to sections 47 and 55 of the , viz.) " (g) other conditions being equal, in the interest of proper co ordination of transport facilities, the expediency of giving due consideration to a State Transport Service; (h)the necessity for preventing unhealthy competition in any route or routes or area on which the State Transport Service may ply;" It was pointed out that the whole scheme of Orissa Act XXXVI of 1947 and Orissa Act I of 1949 was to oust the owners of stage carriage service from business and create a virtual monopoly in favour of the Orissa Road Transport Co. Ltd. or the State Transport Service and thus discriminate against persons in favour of the Joint Stock Company or the State.
Even though the Provincial Government was invested with power to issue or renew the permits which would become inoperative, under section 4(2) (b) of Orissa 36 Act XXXVI of 1947, that power would be exercised only having regard to the object which the State Government had in view in enacting that Act and the only result would be the issue of permits in favour of the Orissa Road Transport Co. Ltd. The position under Orissa Act I of 1949 would be no better in spite of clauses (g) and (h) having been added to sections 47 and 55 of the , because the expediency of giving due consideration to a State Transport Service and the necessity for preventing unhealthy competition therein mentioned would also have the effect of eliminating the private owned stage carriage service altogether and replacing in its stead the State Transport Service.
It was also pointed out that the State Government had arbitrarily and without any rational basis selected certain districts like Ganjam and Puri and parts of Cuttack District for starting the Orissa Road Transport Co. Ltd., and had introduced State Transport Service in certain other districts such as Sambalpur, Keonjhar, Bolangir and some parts of Cuttack District.
Orissa Act XXXVI of 1947 was applied to the former Districts while Orissa Act I of 1949 was applied to the latter Districts.
The provisions of both the Acts being materially different as set out above the application of one Act to particular districts of the State and of the other Act to the other districts of the State was violative of the guarantee of equal protection of laws enshrined in Article 14 of the Constitution.
The owners of stage carriage services to whom Orissa Act XXXVI of 1947 applied had the additional advantage of having compensation granted to them in accordance with the terms of section 6 thereof which advantage was not available to those owners of stage carriage services to whom Orissa Act I of 1949 was applied.
There was also a further advantage which was available to the persons to whom Orissa Act XXXVI of 1947 applied and it was section 8 of the Act which provided that, when permits had been cancelled by the Provincial Government under the provisions of the Act, the Provincial Government may, by notification, require such 37 permit holders or owners to sell any specified vehicle or vehicles and any other movable or immoveable property used in connection with the operation and maintenance of such vehicle or vehicles, to the Company, when so constituted, at the rates assessed in the prescribed manner.
This advantage was not available to the persons to whom Orissa Act I of 1949 applied.
It has, however, to be remembered that the Scheme of Nationalised State Transport had its origin in the White Paper published by the Government of India towards the end of the year 1944 with a view to removing the difficulties coming in the way of proper development of road transport and the need for cheap, efficient and rapid road transport services and the elimination of wasteful competition had been emphasized therein.
The matter was discussed at the meeting of the Transport Advisory Council held in 1945 and the Transport Advisory Council had then drafted a code of principles and practice for regulating the co ordination of rail road transport services which were later ratified by the State Government and accepted by the Government of India.
It was this scheme which was embarked upon by the State of Orissa and several steps were taken by the State Government in order to implement that scheme.
The first step towards such implementation was the enactment of Orissa Act XXXVI of 1947 which envisaged the formation of a Joint Stock Company in which the Central and the Provincial Governments shall together have controlling interests.
Before such a Company could be formed the feudatory States in Orissa had merged in the Province on the 1st January 1948 and the State Government had on its band transport services which were owned by such States and had been taken over by the State Government of Orissa.
These transport services formed the nucleus on the basis of which the State Government thought of adopting another mode of implementing the scheme of Nationalised State Transport and Orissa Act I of 1949 was passed envisaging the State Transport Service which would also serve the same purpose.
When these two modes of implementation, viz., the formation of a 38 Joint Stock Company and the starting of the State Transport Service, were adopted by the State Government, the question naturally arose as to bow these two different ideas could be worked out the fulfil ment of the end in view.
The nucleus for transport services which had been owned by the State Government had to be utilised so far as it was available and having regard to the situation as it obtained, the State Government naturally thought of applying Orissa Act I of 1949 to certain districts of the State leaving the other districts to be served by the mode envisaged in Orissa Act XXXVI of 1947.
Such a zonal or territorial or geographical division of the several districts of the State for implementation of the scheme of Nationalised State Transport by either the formation of a Joint Stock Company or the running of the State Transport Service was based on the availability of the transport services acquired by the State Government from the various merging States and if such a division was made having regard to the situation as it thus obtained, no challenge could be made against it on the ground of discrimination or the denial of equal protection of laws.
What was essential was that, as between the owners of stage carriage services operating on a particular route or in a particular area, no discrimination should be made and all should be treated alike.
If each one of such owners had the same Act applied to them they could not be heard to complain about any discrimination.
They formed a separate group or class by themselves to be treated in a particular manner having regard to the exigencies of the situation and the Government was the best judge of the circumstances which obtained within the particular locality which necessitated the application of one Act or the other for the implementation of the scheme.
If the State Transport Services were not sufficient in number and could not fully serve the purpose sought to be achieved, the State Government would well be within its rights to form a Joint Stock Company as envisaged in Orissa Act XXXVI of 1947 and if such a JointStock Company could not be formed within a 39 measurable distance of time, the State Government could very well allow the old order of things to continue under which the owners of stage carriage services would be governed only by the provisions of the .
It all depended upon the administrative convenience as to whether the State Government could adopt one mode of implementation of the scheme or the other and no blame could be laid at its door if, in the circumstances of this case, it adopted one mode of implementation in one district or part of a district and adopted another mode of implementation in another district or another part of a district provided, however, as we have stated above, all persons who were operating on a particular route or routes or were located in a particular area or disict were treated equally and without any d nation interse.
Such zonal or territorial or geogra phical division, therefore, would not be violative the equal protection of laws.
A further argument which was addressed before us on behalf of the petitioners may be noted here and it was that Orissa Act I of 1949 bad been applied to some of them and that Act provided for no compensation to be given to them as in the case of those owners of stage carriage services to whom Orissa Act XXXVI of 1947 had been applied.
That, it was contended, was discriminatory as between the several owners of stage carriage services and thus violated Article 14 of the Constitution.
This argument, however, ignores the fact that under Orissa Act XXXVI of 1947, the permits issued or renewed in favour of the owners of stage carriage services by the Provincial Transport Authority or the Regional Transport Authority cease to be operative or are cancelled by the Provincial Government as the case may be and compensation is given to such permit holders for such premature termination or cancellation of their permits.
The owners of stage carriage services to whom Orissa Act I of 1949 is applied stand, however, on a different footing.
Their permits continue for the normal period and the considerations which are laid down in clauses (f) and (g) which have been thereby added to sections 47 and 55 of the , would come into 40 play when these permits which have expired by lapse of time come to be considered for renewal on applications made by permit holders in that behalf.
These permits may or may not be renewed in favour of these permit holders but the non renewal of such permits would not be on a par with the premature termination or cancellation of the permits held by the owners of stage carriage services to whom the provisions of Orissa Act XXXVI of 1947 were applied.
The two positions, therefore, are not similar and the permit holders under Orissa Act I of 1949 do not fall in the same class or group as the permit holders under Orissa Act XXXVI of 1947.
There is no question, therefore, of any discrimination between these two classes or groups of permit holders and it cannot be validly urged that the provisions of the impugned Acts in so far as they applied to different classes or groups of permit holders are in any manner violative of the fundamental right embodied in article 14 of the Con stitution.
The argument that the provisions of the impugned Acts were designed with a view to oust the private stage carriage services from business altogether and were intended to create a virtual monopoly in favour of the Joint Stock Company or the State as the case maybe is also now of no avail.
Saghir Ahmad 's case(1) was particularly relied upon by the petitioners in support of their contentions but article 19(6) of the Constitution as amended by the Constitution (First Amendment) Act, 1951, enacts that "Nothing in sub clause (g) shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause, shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, (i). . . . . (ii)the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, (1) ; business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise".
This amendment excludes all argument in regard to the alleged ousting of the private owned stage carriage services and the creation of a virtual monopoly in favour of the Joint Stock Company or the State.
The Orissa Road Transport Co. Ltd. which is a Joint Stock Company formed under the provisions of Orissa Act XXXVI of 1947 and the State Transport Services which are envisaged in Orissa Act I of 1949 would, therefore, be able to carry on their business even if it resulted in the complete elimination of the privateowned stage carriage services without any violation of the fundamental right guaranteed under article 19(1)(g) of the Constitution.
It was attempted to be argued on behalf of the petitioners that the amendment of article 19(6) of the Constitution would not affect the position as it obtained under the impugned Acts because these Acts had been long in operation before the amendment came into force and the petitioners were entitled to relief based on our decision in Saghir Ahmad 's case, supra.
A similar argument was sought to be advanced before us in Petitions Nos.
189 to 193 of 1955 Bhikaji Narain Dhakras vs The State of Madhya Pradesh & Another") and that argument was repelled by us in the manner following: "The contention of the respondents before us is that although the amending Act, on the authority of our decision in Saghir Ahmad s case (supra), became on and from the 26th January 1950 void as against the citizens to the extent of its inconsistency with the provisions of article 19(1)(g), nevertheless, after the 18th June 1951 when clause (6) was amended by the Constitution (First Amendment) Act, 1951 the amending Act ceased to be inconsistent with the fundamental right guaranteed by article 19(1) (g) read with the amended clause (6) of that article, because that clause, as it now stands, permits the creation by law of State monopoly in respect, inter alia, of motor transport business and it became operative again (1) ; 6 42 even as against the citizens. . .
In our judgment the contentions put forward by the respondents as to the effect of the Constitution (First Amendment) Act, 1951 are well founded and the objections urged against them by the petitioners are untenable and must be negatived".
It is hardly necessary for us to consider the further contention urged by the petitioners, viz., that the fundamental right guaranteed under article 19(1)(f) and under article 31(2) had been violated.
If the permits held by them under the , were prematurely terminated or cancelled under the provisions of Orissa Act XXXVI of 1947 compensation was provided by the Act itself.
If there was no renewal of their permits on the expiration thereof after they had run for their normal period by virtue of the provisions of Orissa Act I of 1949, no claim could be made by them on the score of such non renewal because renewal was not a matter of right.
The Provincial Transport Authority or the Regional Transport Authority would be well within their rights to refuse such renewal having regard to the provisions of the amended sections 47 and 55 of the , and, if at all there was any deprivation of their proprietary rights, it would be by authority of law.
Nor need we pause to consider the last contention urged on behalf of the petitioners that the impugned Acts violated the guarantee of freedom of inter State and intrastate trade or business embodied in article 301 of the Constitution.
In the first instance, it is not a fundamental right conferred by Part III of the Constitution which can be enforced by a petition under article 32.
Moreover, article 305 as it stood before the amendment and the amended article 305 which came into effect after the Constitution (Fourth Amendment) Act, 1955, afford a complete answer to this contention of the petitioners.
The result, therefore, is that there is no substance in any of the contentions urged on behalf of the petitioners and the petitions must, therefore, stand dismissed as ordered by us already.

summary:
The petitioners were owners of Stage Carriage Services holding permits under the Motor Vehicles Act of 1939.
The State Government 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 1947) 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 of January, 1955, either the Orissa Road Transport Co. Ltd., or the State Transport Service, formed under the two Acts, 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 provisions 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 contravened article 14 of the Constitution.
It was further contended that the provisions of the Acts and rules framed thereunder infringed articles 19(1)(f) and (g) by putting restrictions on the rights to hold property and to practise trade and business, that the Notifications 29 purporting to take away their transport business amounted to confiscation without compensation and infringed article 31(2) and lastly, that the impugned Acts violated freedom of inter state and intrastate trade guaranteed by article 301 of the Constitution.
Held, that the owners of Stage Carriage Services operating a particular route or in a particular area formed a separate group or class by themselves and so long as each one of such a group or class was governed by the same Act and treated 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 applied 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 fib to make for that purpose according to different circumstances 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, and 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 discrimination.
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 article 19(1)(f) was no longer tenable in view of article 19(6) of the Constitution as amended by the Constitution (First Amendment) Act of 1951.
Saghir Ahmad vs The State of U. P. ([1965] 1 S.C.R. 707), held inapplicable.
Bhikaji Narain Dhakras vs The State of Madhya Pradesh ([1955] 2 S.C.R. 589), applied.
That the provisions of the impugned Acts could not be held to contravene articles 19(1)(f) and 31(2) of the Constitution as the Act of 1947 did provide for compensation for premature termination and under the Act of 1949, renewal could not be claimed as a matter of right and any deprivation of proprietary right would be by authority of law.
That freedom of inter state or intrastate trade guaranteed by article 301 of the Constitution is not one of the fundamental rights that can be enforced under article 32 of the Constitution and article 305 as amended by the Constitution (Fourth Amendment) Act of 1955 was a complete answer to that contention of the petitioners.