Court sets aside approval order, directs reconsideration of scheme with proper hearing. Appellant awarded costs.

The Court allowed the appeal, set aside the approval order, and directed a reconsideration of the draft scheme with a proper hearing. The appellant was awarded costs from the State of Rajasthan, and the writ petition was dismissed without costs.

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Issues:
1. Approval of a scheme under Chap. IV-A of the Motor Vehicles Act.
2. Rejection of draft scheme by the officer.
3. Scope of the hearing under s. 68-D(2).
4. Authority to approve or modify a scheme.
5. Taking of evidence during the hearing.

The judgment pertains to two connected matters arising from the approval of a scheme under Chap. IV-A of the Motor Vehicles Act. The appellant operated a bus on a permit between Jaipur and Ajmer, which was challenged through objections to a draft scheme published by the State Government. The officer appointed to hear objections rejected the appellant's requests to present evidence and ultimately approved the scheme, leading to the cancellation of the appellant's permit. The appellant contended that the officer erred in rejecting the draft scheme entirely and in not allowing the presentation of evidence during the hearing.

Rejection of Draft Scheme:
The Court analyzed the authority granted under s. 68-D(2) to approve or modify a scheme. It was emphasized that the State Government has the discretion to reject a draft scheme entirely, even though the word "may approve" implies the option to not approve. The Court clarified that the power to reject a scheme is inherent in the authority's ability to approve or modify it. The officer's belief that he lacked the power to reject the scheme was deemed incorrect, influenced by a previous High Court decision. The Court also compared the language of r. 7(6) with s. 68-D(2), emphasizing the discretionary nature of the approval process.

Scope of the Hearing under s. 68-D(2):
The Court discussed the quasi-judicial nature of the State Government's role in approving schemes under s. 68-D. It was established that the purpose of the hearing is to assess whether the proposed scheme aligns with providing an efficient, adequate, and coordinated road transport service. The Court highlighted that a hearing before a quasi-judicial authority is not limited to arguments but may include the taking of evidence, both oral and documentary. The officer's decision to restrict the hearing to arguments only was deemed erroneous, as evidence may be necessary to arrive at a just conclusion regarding objections to the draft scheme.

Taking of Evidence during the Hearing:
The Court clarified that while evidence, either oral or documentary, may be produced during a hearing under s. 68-D(2), the State Government or the officer retains the power to control the proceedings. The Court emphasized that the production of evidence should be relevant and necessary for the inquiry, and the parties are entitled to present evidence within reason. The officer's refusal to allow the presentation of evidence was considered incorrect, as it hindered the appellant's right to a fair hearing under s. 68-D(2).

In conclusion, the Court held that the approval of the scheme lacked a proper hearing under s. 68-D(2) due to the officer's errors in rejecting the draft scheme entirely and not allowing the presentation of evidence. The Court allowed the appeal, set aside the approval order, and directed a reconsideration of the draft scheme with a proper hearing. The appellant was awarded costs from the State of Rajasthan, and the writ petition was dismissed without costs.

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