AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1972 (11) TMI 109
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.... NOTIFICATION Whereas the State Government issued a notice under Section 38 of the Road Transport Corporation Act, 1950 (Central Act LXIV of 1950) to the Rajasthan State Road Transport Corporation on 18th April, 1972 to show cause why it should not be superseded; AND whereas the State Government after considering the explanation and objections of the Corporation is of the opinion that the Corporation is unable to perform and has persistently made default in the performance of the duties imposed on it by or under the provision of the Road Transport Corporations Act and has further abused its powers. Now, therefore, in exercise of the powers conferred upon it under Sub-section (1) of Section 38 of the Road Transport Corporations Act, 1950 (Central Act LXIV of 1950) the State Government with the approval of the Central Government, hereby supersedes the Rajasthan State Road Transport Corporation for a period of six months. By Order of Governor Sd/- Ram Singh Commissioner for Home Affairs, & Secretary to Government." 2. In exercise of its powers under Section 3 of the Road Transport Corporations Act, 1950 (Act No. LXIV of 1950) the Government of Rajasthan estab....
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.... Banger. 8. Raja Dhiraj Shri Hemendar Singh, M. P. 9. Shri Hazari Lal Sharma. 3. The petitioner's case is that during his tenure of office as Chairman the Corporation greatly improved its financial position and working, yet by a notice dated 18-4-72 the Government of Rajasthan called upon the Corporation to show cause why it should not be superseded. The notice Annex. 3 runs as follows:-- "GOVERNMENT OF RAJASTHAN Home (Gr. VII) Department No. F. 7. (3) (3) Pari/72, Dated 18-4-72 NOTICE Whereas the State Government, on grounds specified in the Annexure hereto, is of opinion that the Rajasthan State Road Transport Corporation is unable to perform and has persistently made default in the performance of the duties imposed on it by or under the Road Transport Corporations Act, 1950 (Central Act LXIV of 1950) and further has abused its powers: And whereas the State Government, on the basis of these grounds, proposes to supersede the said Corporation for a period of six months. The State Government, therefore, hereby requires the Rajasthan State Road Transport Corporation to show cause within 7 days from the date of receipt of this notice why ....
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....d fair decision on the demands and grievances of the employees. The Corporation did not tackle with the problems due to which the strike took place and caused undue delay in solving these problems for the following reasons: (i) The meeting of the Corporation which was fixed for 25th February, 1972 was cancelled without any valid reason, (ii) Even in the special meeting of the Corporation held on 28th February, 1972 no definite decision to tackle with the situation was taken. (iii) Despite the reported failure of mediation efforts made by the Labour Commissioner and submission of the report of the Sub-Committee for rationalisation of the Pay Scales, the Chairman did not show any readiness to convene even though by that time the strike period had entered its 13th day and in view of this inaction on the part of the Chairman, the Corporation failed to take any effective steps to meet the grave situation which resulted in heavy losses to Corporation and great inconvenience to the general public. (iv) In view of the fact deteriorating situation a procedure of calling a requisitioned meeting had to be resorted to. Even this requisitioned meeting was not....
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.... stand taken by the Corporation with respect to them will be made by us a little later. Suffice it to say for the present that the Corporation put up a strong opposition to show cause notice. The Government of Rajasthan, however, in exercise of the powers under Section 38 of the Act, with the previous approval of the Central Government superseded the Corporation for a period of six months by the notification dated 20-5-72, already reproduced above. By another notification dated 20-5-72 (Annex. 6) the Government of Rajasthan directed that all the powers and duties which may be exercised or performed by or on behalf of the Corporation would during the period of supersession be exercised and performed by Shri Raj Kumar Sastri, I. A. S. 6. The main points argued at length by the learned counsel for the petitioner in support of the petitions are as follows:-- (1) Since as provided under Section 36 of the Act the State Government had not appointed any person to make enquiries into the activities of the Corporation and to report to the State Government the result of such enquiry, the State Government had no material before it to form an opinion that the Corporation is unable t....
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....behalf of Union of India non-petitioner No. 2. 8. At the commencement of the hearing of the case a preliminary objection was raised by the learned Advocate General on behalf of the State of Rajasthan that the petition should be dismissed on the ground that the petitioner has no locus standi to file the petition and maintain this action. It has been urged by him that the impugned order was voidable and not a nullity and even though the petitioner was Chairman of the Corporation at the time of its supersession but that does not give him any right to complain independently of the Corporation. It has been argued that the petitioner has nowhere shown that he is representing the Corporation or filing this petition on its behalf. In support of his contention the learned Advocate General placed strong reliance on Alfred Thangarajah Durayappah v. W.J. Fernando, 1967-2 AC 337; K. Narasimha v. State of A. P. 1970 1 Andh WR 322; Nazla Rob v. Commissioner of Wakf, West Bengal, AIR 1972 Cal 389; Peru Paltu Gho.si v. Asst. Custodian, Mathura, AIR 1961 All 299; Charanjit Lal v. Union of India, AIR 1951 SC 41 and Ayodhya Prasad v. State of U. P., AIR 1968 SC 1344. Another ground urged in this....
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....he District Collector under Section 2 of the Gram Panchayat Act. He questioned the act of the Collector by a writ petition which was resisted on the ground that the petitioner was not the aggrieved person and it was only the Panchayat which could, if it so chose, question the action of the Collector by filing a petition. The learned Judge following the verdict in Durayappah's case (1967) 2 AC 337 dismissed the writ application as not maintainable. 11. In AIR 1972 Cal 389 the petitioner was the President of an Administrative Committee appointed in respect of Hazi Belayet Hussain's Kstate of Arna. The Administrative Committee was dissolved by the Commissioner of Wakfs. The petitioner challenged propriety and validity of the order of the Commissioner by an application under Article 226 of the Constitution. It was held that the Administrative Committee had no vested right as such in the wakf estate, and consequently the petitioner could not maintain the petition. 12. In AIR 1968 SC 1344 their Lordships distinguished the earlier case decided by their Lordships: Ram Dial v. State of Punjab, AIR 1965 SC 1518 and observed that in Ram Dial's case the Punjab Municipality Ac....
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....8 SC 1344: "Of course, if the action in abolishing the Khand could be shown to be directly connected with the removal of the Pramukh, the action of the Executive Government can be struck down as mala fide". The objection as to the maintainability of the action by the petition, therefore, cannot be accepted in the circumstances of the present case, unless the question of the existence of any mala fide intention is determined. It is of course well established that the existence of the right is the foundation of the exercise of jurisdiction of the Court under Article 226 of the Constitution, Reference may usefully be made to the observations of His Lordship Kania, C.J., in State of Orissa v. Madan Gopal, AIR 1952 SC 12: "The language of the Article shows that the issuing of writs or directions by the Court is founded only on its decision that a right of the aggrieved party under Part III of the Constitution (Fundamental Rights) has been infringed. It can also issue writs or give similar directions for any other purpose. The concluding words of Article 226 have to be read in the context of what precedes the same. Therefore, the existence of the right is the foundation of the e....
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....ding of the speech of Lord Morris in 1964 AC 40 (supra). Prof. Wade's conclusions, so far as relevant for our purpose are: (a) Acts of public authorities "are either lawful and valid or unlawful and void. That is why Voidable' has never played a part in administrative law and should play no part now;" (b) "The question whether a third party can challenge a void Governmental act not aimed primarily at himself is governed by settled rules which vary according to remedy sought. These rules have long been in operation without any such question as 'void or voidable' being thought relevant"; (c) "It is erroneous to suppose that an unlawful administrative act can have legal effect only if it is called voidable as opposed to void. If not challenged in law, or if the Court will not grant a remedy under the usual rules, a void act may have the effect of a valid act, since it cannot be opposed." (83 L Q R 529); aud (d) "The Courts have always held that failure to give a fair hearing makes (no decision void, not voidable," (84 L Q R115.) In State of Orissa v. Binapani Dei, AIR 1967 SC 1269 at p. 1271, a case which is in line with the decision....
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....s no place in such acts, because the contention of the petitioner in this case is that the impugned order of supersession is void and a nullity and as such can be challenged by the petitioner even though other members of the Corporation have not joined him in filing the petition. This necessitates an enquiry into the merits of the petition. We may point out here that the learned Advocate-General strongly pressed upon us that the petition should be dismissed on the short ground that the action is not maintainable by the petitioner, and the petition need not be examined at all on merits. In view of what we have stated above we are unable to accede to the submission made by the learned Advocate-General. It may not be out of place here to mention that the petitioner seeks to show that the order of supersession is invalid and null and void. Whether in the circumstances of the present case we would be inclined to interfere at the instance of the petitioner is a different question which we would answer later. Suffice it to say that the petitioner is not liable to be nonsuited on the short ground that he cannot maintain this action. 19. We, therefore, propose to deal with the objecti....
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.... fund of the Corporation, and if the expenses are not so paid, the State Government may make an order directing the persons having the custody of that fund to pay to the person so authorised such expenses in priority to any other charges against such fund and he shall, so far as the funds to the credit of the Corporation admit, comply with the order of the State Government. (3) Every notification issued under this section together with a report on the circumstances leading to its issue shall be laid before the Legislature of the State, as soon as may be, after it is issued. 38. Power to supersede a Corporation--(1) If the State Government is of opinion that a Corporation established by that Government is unable to perform or has persistently made default in the performance of the duties imposed on it by or under the provisions of this Act or has exceeded or abused its powers, the State Government may, with, the previous approval of the Central Government, by notification in the Official Gazette, supersede the Corporation for such period as may be specified in the notification: Provided that before issuing a notification under this sub-section the State Go....
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.... notification. This section does not envisage any inquiry. It is a different thing to say that the State Government must act honestly and like a reasonable person to form the opinion and the opinion must not be altogether arbitrary and must be based on some material. But that does not mean that it must get a regular inquiry conducted as contemplated by Section 36. We are, therefore, of opinion that the power under Section 38 is not governed by Section 36 of the Act and the impugned order cannot be struck down because the State Government did not get any inquiry made against the Corporation under Section 36 of the Act. 23. Then we come to the next question whether the impugned order is liable to be struck down as being mala fide? It is no doubt established that interference by the Court will be warranted by law when the executive authority is not exercising its powers bona fide for the purposes contemplated by law or is influenced by extraneous and irrelevant considerations. The petitioner's allegation in this connection is contained in para (ay) of the writ petition (at page 107). It is submitted that Shri Barkatullah Khan, Chief Minister of Rajasthan, is hostile to the peti....
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....is allegation. 25. As to the second branch of the argument under the Head "Mala fides" Shri Barkatullah Khan in his affidavit dated 11-8-1972 emphatically denied that he wanted to or now wants to make his cousin Shri Liyakatullah Khan the Chairman of the Corporation and that the supersession of the Corporation was motivated by any such consideration of appointing Shri Liyakatullah Khan as Chairman or on account of any hostility against the petitioner. In face of this denial of Shri Barkatullah Khan the ground taken by the petitioner that the supersession was motivated by ulterior considerations also fails and the objection of the petitioner that the impugned order is liable to be struck down on the ground of mala fides must be overruled. 26. The next point urged by the learned counsel for the petitioner is that the power of supersession conferred upon the State Government under Section 38 is of a quasi judicial nature and since the impugned order is not a speaking order and does not record reasons, it is invalid. In this connection it has also been argued that the impugned order was passed after the receipt of the inquiry report from the Home Commissioner Ram Singh and since ....
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....the Rajasthan State Road Transport Corporation Act. 1950. The Rajasthan State Road Transport Corporation, therefore, should be superseded. The approval of the Central Government may be obtained." It was neither argued nor even suggested before us that reasonable time was not given to submit the explanation. Thus so far as the procedural requirement contained in Section 38 is concerned it has been fulfilled. 28. The contention of the petitioner however is that the impugned notification Annex. 5 does not record the reasons for supersession but it merely produces the language of the section. In this connection some cases were cited before us where the impugned order was struck down on the ground that it did not contain the reasons for making the order and the direct authority relied in this connection is MANU/MP/0029/1970. In our opinion that authority has no application to the present case inasmuch as in that case Section 422 of the Madhya Pradesh Municipal Corporation Act. 1956 under which the order of supersession was passed itself provided that "such order shall be published in the Gazette and the reasons for making it shall be stated therein." A bare look at Section 38 of t....
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.... circumstances of the present case at all. 29. Another argument made on behalf of the petitioner in connection with the same point is that the Home Commissioner had conducted an enquiry into the activities of the Corporation and had submitted his report against it to the Government, and thereupon a show cause notice was issued to the Corporation. It is contended that the Government was bound to supply a copy of the inquiry report to the petitioner. There is indeed a serious objection raised by the learned Advocate General to the petitioner being permitted to argue this point as this point was not taken in the writ petition. The learned counsel for the petitioner conceded that such an objection had not been taken in the petition, but he has urged that the same has been taken in the rejoinder and the facts giving rise to this objection have been revealed by the State Government itself in its reply to the writ petition. Our attention was invited to the following paragraph contained in the reply of the State of Rajasthan (at Page 168 of the Paper Book). "That while all this was being looked into, the Home Commissioner also visited the Corporation Office and had discussions ....
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....ow that the show cause notice which was issued by the State Government to the Corporation on 18-4-72 was the result of the happenings in the Corporation itself and was due to the unsatisfactory conditions which were then prevailing in the Corporation." 30. Two affidavits, one of Shri Inderjit Khanna. Deputy Secretary to the Government of Rajasthan dated 20-10-1972 and the other of Shri Ram Singh, Commissioner for Home Affairs and Secretary to the Government of Rajasthan in the Home Department dated 26-10-1972 have been filed to clarify the position on behalf of the Government. At one stage the learned counsel for the petitioner raised an objection to these affidavits being admitted but later on he did not press his objection and himself referred to them in the course of arguments, and thereby gave an impression that he had no objection to these affidavits being looked into by us. That apart, in the circumstances we are inclined to admit these affidavits and have taken them on record. 31. After reading the relevant averments in the reply as well as the affidavit of Shri Ram Singh we are convinced that no preliminary inquiry was ordered by the Government before passing the impu....
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....court. It really pertains to administration and the function of the Minister in the matter of deciding the question of supersession is administrative and not in the ordinary sense judicial. In this connection we are tempted to reproduce some observations made by Haldane L. C. in Local Government Board v. Arlidge 1915 AC 120 133:-- "The Minister at the head of the Board Is directly responsible to Parliament like other Ministers, He is responsible not only for what he himself does but for all that is done in his department The volume of work entrusted to him is very great and he cannot do the great, bulk of it himself. He is expected to obtain his materials vicariously through his officials, and he has discharged his duty if he sees that they obtain these materials for him properly. To try to extend his duty beyond this and to insist that he and other members of the Board should do everything personally would be to impair his efficiency. Unlike a Judge in a Court he is not only at liberty but is compelled to rely on the assistance of his staff." 34. The above observations. In our opinion, can aptly be applied to the present case. On the explanation to the show cause havin....
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....he relevant capers from the State Government the whole matter was carefully examined by the Central Government on the point whether in the facts and circumstances of the case it would be advisable for the Central Government to accord the necessary approval for the supersession of the Corporation and that after such examination the Central Government came to the conclusion that it was a fit case wherein the necessary approval may be accorded- It has also been stated by Shri Narayanan that in this connection the views of the Ministry of Railway were also sought and they also concurred and had no objection to the State Government's proposal for the supersession of the Corporation for a period of six months. 37. An argument was made by the learned counsel for the petitioner that it has nowhere been stated in the affidavit of Shri Narayanan as to which particular officer had examined the matter and which had accorded the sanction. It is important to note in this connection that no such objection was taken by the petitioner in his writ petition that the approval had not been given by a competent authority. If any such objection had been taken then only the opposite party would hav....
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....ays down that the business of the Government shall be transacted in the Secretariat Departments specified in the First Schedule, and shall be classified and distributed between those departments as laid down therein. Rule 5 further lays down that the Government shall On the advice of the Chief Minister allot among the Ministers the business of Government by assigning one or more departments to the charge of a Minister provided that nothing in this rule shall prevent the assigning of one department to the charge of more than one Minister. In the first schedule 'the State Owned Motor Transport' appears at Item No, 13, under the Head (iii) Home Department. We are told by the learned Advocate General, and a Gazette Notification was also shown to us that the State Owned Motor Transport Was assigned to the charge of Shri Hardeo Joshi, though the Home Department was in the charge of the Chief Minister. This according to us, could legitimately be done under the proviso to Rule 5 referred to above. 40. Article 166 provides that all executive action of the Government of a State shall be expressed to be taken in the name of the Governor. It further provides that orders and other in....
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.... the statement of grounds supplied to the Corporation along with the show cause notice are not controverted. For instance it is not denied by the petitioner that in accordance with the instruction issued by the State Government on 20-7-1971 to create City Transport Service for the city of Jaipur no City Transport Service in the City of Jaipur was created. It is also not denied (at page 77 of the writ petition) that about 100 new vehicles are lying idle at present. Similarly it is not controverted that the Corporation failed to implement the third party liability Insurance Fund Rules, inasmuch as it is admitted at page 77 of the writ petition by the Corporation that in many cases the reports were not regularly made to the District Magistrate as contemplated by the Rules. It is also incontrovertible that the employees of the Corporation went on strike from 22-2-72 and the strike lasted till 27-3-1972. It is not necessary to multiply the various grounds relied upon by the State Government as if not all most of them are not controverted. It is true that the petitioner has come forward with an explanation with respect to each of the grounds and has tried to justify his stand, but it ....