Holding

The High Court's finding of bias was unsupported; the approval of the schemes is valid and the interim orders remain effective.

Summary

The Andhra Pradesh State Road Transport Corporation (APSRTC) drafted about 70 schemes in 1977 to nationalise bus routes, excluding private operators. After objections, a new government in 1983 had the Transport Minister approve the schemes, which the High Court later quashed on grounds of alleged bias and corruption. Fresh objections were heard, with accusations that the Minister had taken bribes to defer the schemes, yet he approved them in 1984 and the subsequent government issued gazette notifications in 1985. The Supreme Court examined whether the allegations of corruption were substantiated, whether the delay in approval was unreasonable, and whether the interim orders permitting implementation should remain. It held that the allegations were vague and unsupported, the delay between 1983 and 1985 was not unreasonable, and the interim orders should continue, thereby restoring the schemes. Consequently, the appeals were allowed and the approval of the schemes was upheld.

Issues considered

Whether the alleged corruption and bias of the Transport Minister warranted quashing the nationalisation schemes.
Whether the delay in approving the schemes (1977‑1983 and 1983‑1985) was unreasonable.
Whether the interim orders allowing implementation of the schemes should remain in force.
Whether the schemes complied with the provisions of the Motor Vehicles Act, 1939.

Legislation cited

Motor Vehicles Act, 1939s. 68-C, s. 68-D, s. 68-E

Subjects

nationalisationtransport routesbiascorruption allegationsdelayMotor Vehicles Actinterim orderSupreme Courtwrit petitionclean hands

Judgment

-< ANDHRA PRADESH STATE ROAD TRANSPORT A
CORPORATION
v.
M.GUR!VI REDDY AND ORS. ETC. ETC.

AUGUST 19, 1992
I B
[LAUT MOHAN SHARMA AND S. RANGANATHAN, JJ.)
>-
Motor Vehicles Act, 1939:

Sections 68-C and 68-D-Draft scheme for nationalisation of certain
routes-Published in Gazette in 1977-Approval in 1983-Quashed by High
c
Court-Change in Govemment--Fresh objections filed and heard-Conup-
tion charges against Transport Ministe,-.Scheme approved in 1984-Gazetted
+ after 1 year by New Government when the Minister was no more in .
power-Allegations of conuption and bias-Whether substantiated-Approval ·
of the Schemes-Whether valid-Delay caused in approval of the Schem~ D
Whether reasonable:

The respondents were plying stage carriages on various routes in a
district. On 17.S.1977, the appellant-Corporation gazetted about 70 draft
-f schemes proposing to ply their buses to the complete exclusion of other ,
private operators plying their vehicles in that district. The private
E
operators raised their objections to the schemes, and only in 1983 when a
'""C new Government was formed, the schemes were approved by the 1

Transport Minister. Against this order, the private operators ,filed writ
Petitions and the High Court quashed the order with a direction that the
operators should be heard afresh and the change in circumstances should F
~
1

be taken into account before finalising the schemes.

Thereafter: fresh objections were invited and the Transport Mini-
I
ster heard the objections. The operators objected to this alleging that the
Transport Minister had taken illegal gratification from some of the
operators promising to defer the schemes. In the meantime there was G
~
again a change in the Government, but the Transport Minister continued
as such in the new Government as well and he approved the scheme. Again
there was a change in Government and the new Government issued
various orders approving the schemes. Against this, Writ Petitions were ·
tiled before the High Court. Most of the Writ Petitions were dismissed on H
935
)-

936 SUPREME COURT REPORTS (1992) 3 S.C.R.

A the short ground that the petitioners did not approach the Court with
clean hands, as the p:titioners claimed they bribed the Transport Mini-
ster for deferring the scheme of nationalisation. The other Writ Petitions
were alfo1l·ed, and the State Government wns directed to give a fft'.sh
bearinJI: to the petitioners before finalising the scheme afresh.
B The present appeals were filed against that part of the High Court's
order· allowing some of the Writ Petitions.

On behalf of the appellants it was contended that there was hardly
any case of bias made out against the Minister and the allegations made
C wene vague and not substantiated; and that the gazette notifications ap-
proving the schemes were issued much later, when the Transport Minister
was no longer in charge of the Ministry concerned, which indicated that
the ;approval by the Minister had been ratified by the subsequent Govern-
. me•at of which he was not a member. +
D On behalf of the Respondents, it was urged that there was inor-
dinate delay in the approval of the schemes and that the appellant-Cor-
poration was not in a fit condition to ply buses on all the routes on
account of its bad management and poor financial position.

Allowing the appeals, this Court
E
HELD : 1. The Transport Minister did not do anything to oblige the
transporters who were said to have given him illegal gratification. In fact
he acted contrary to their interests. His approval of the schemes could well
have been motivated by his faith in the nationalisation policy rather than
F represent an attempt to get out of an embarrassing situation created by
the allegations made against him as. surmised by the High Court. This
consideration apart, there was no specific material to substantiate the
allegatioJJs of corruption referred to or relied upon by the High Court.
Also, the approval was gazetted only almost a year later, after the con-
G cerned Minister went out of-the picture. Having regard to all these con-
siderations, the High Court's conclusion that the enquiry and approval
were biased and therefore the scheme should be quashed is based on no
material and cannot be sustained. [941E-G]

2!. The contention as to the delay between 1977 when the draft
H schemes were gazetted and the first approval in 1983 has been examined
S.R.T.C. v. GURIVI REDDY [RANGANATIIAN, J.] 937

and rejected by the High Court. The delay between 1983 and 1985 cannot, A
in the facts and circumstances of the case, be considered to be ~n
reasonable. [942D]

3. By the interim orders passed by this Court, the State Government
was permitted to act on the schemes. The aggrieved operators were also
given an opportunity to apply to the Government for modifying the B
schemes, but no application has been made. The schemes have been in
operation for the past 6 years or more and, if disturbed now, it may le~d
to complete chaos by restoring a situation which has ceased to exist for
more than six years. The interim order permitting the Government to
implement the schemes will continue to be in force unless and until
modified in appropriate proceedings. (9418, 942A,B,E]
c
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 733-70
of 1986.

From the Judgment and Order dated 22.11.1985 of the Andhra D
Pradesh High Court in Writ Petition Nos. 9705, 9708, 9752, 9777, 9778,
9779, 9780, 9781, 9799, 9810, 9816, 9821, 9823, 9824, 9832, 10069, 10606,
10608, 11063, 11070 & 11076 of 1985.

Altaf Ahmed, Addi. Solicitor General and B. Parthasarthy for ~he
Appellant. E
B. Kanta Rao and T.V.S.N. Chari for the Respondents.

The Judgment of the Court was delivered by

RANGANATHAN, J. These are two batches of 19 appeals each. One F
set of appeals has been filed by Andhra Pradesh State Road Transport
Corporation (A.P.S.R.T.C.) and the other set of appeals has been fi!ed by
the State of Andhra Pradesh. Both the sets of appeals are directed against
the judgment of the Andhra Pradesh High Court dated 22.11.1985. All, the
appeals can be disposed of by a common judgment.
G
The respondents in both sets of appeals are transport operators, who
)r-;. were plying their stage carriages on various routes in Cuddapah district.
On 17.5.77, the APSRTC gazetted about 70 draft schemes under which
they proposed to ply their buses to the complete exclusion of other private
operators plying their vehicles in the above district. Naturally the private H
938 SUPREME COURT REPORTS [1992) 3 S.C.R.

A operators raised objections to these schemes. It appears that till about 1981 )r-
the Government was also lukewarm about the process of nationalisation.
However, a new Government was formed in 1983, which took up for
hearing the objections to the draft scheme published in 1977. The
Transport Minister passed an order approving the scheme. The private
operators filed a batch of writ petitions and the High Court, vide its orders
B dated 16.12.83, quashed the approved schemes with a direction that the
operators should be heard afresh and the change in circumstances should
be taken iiito account before finalising the schemes. On 24.4.84, fresh
objections were invited. The Transport Minister heard these objections.
The operators objected to his hearing the objections, alleging that he had
c taken illegal gratification from some of the operators promising to defer
the schemes. In the meantime there was a change in Government but the
Transport Minister continued in the new Government with the same
portfolio and he approved the schemes on 9.9.1984. A few days later, the
new Government resigned and the previous Chief Minister came back to
power. Thereafter, about a year later, on 7.8.85, The Government issued
-..+-
D various Government orders approving the schemes.

In August 1985, about 80 writ petitions were filed in the High Court.
These were disposed of by an order dated 22.11.1985. By the said order,
the High Court dismissed 60 writ petitions 011 the short ground that these
E petitioners had not approached the court with clean hands and were not
entitled to the exercise of the court's discretionary powers under Article
226 of the Constitution. This was because these writ petitions had con-
tained an allegation that the writ petitioners either directly or through their
~
representatives had giveri bribes to the Minister in question for deferring
F the scheme of nationalisation. The other 22 writ petitions were, however, "
allowed by the High Court by the same order dated 22.11.1985 common to
all the writ petitions. ~

The transporters, whose writ petitions had been dismissed, preferred
SLP No. 15292 of 1985 and other connected petitions before this Court.
G The State Government as well as APSRTC filed special leave petitions
from that portion of the order of the High Court, which allowed writ
petitions of 22 petitioners and directed the State Government to give a /""- ....
fresh hearing t~ these petitioners before finalising the schemes afresh. The
order dated 6.12.85 of this Court by which the earlier batch of SLPs was
H dismissed reads as follows:
""'
S.R.T.C. v. GURIVI REDDY [RANGANATHAN, J.] I 939

"Dr. Chitale, Sr. Advocate says that the Government of Andhra A
Pradesh and the State Transport Undertaking of the Afidhra
Presdesh wvuld be questioning that part of the order under
appeal under which some operators are given further oppor-
tunity to object before the State Government. We however do
not find any ground to interfere with the judgment under appeal
B
at the instance of the petitioners before us. Also we do not find
any substance in the contention that public interest has suffered
in this case. We expect the State Government to take action
under S.68-E of the Motor Vehicle Act if there is any difficulty
felt by the members of the general public by the operation of
the Scheme. c
~
The Special Leave Petitions are dismissed."

However, when the present batches of special leave petitions came

+ up before this court, it passed the following order on 27.2.1986:
D
"Special Leave granted in all the matters. The judgment of the
High Court is stayed in terms of prayer (a) pending N/M the
schemes may be put into operation subject to the result of the
I
appeals."

This is how the present batch of 38 appeals are before us.
E

Though there were as many as about 70 schemes before the Govern-
ment, the stages of gazette notification, consideration of objections and
~
approval were all simultaneous. No special features in respect of any of
these schemes have been brought to our notice which would distinguish F
any one of them from the others. As we have already mentioned,· the
~ ground on which the approval granted to the scheme was attacked was .that
the Transport Minister had received illegal gratification from some of the
transporters or their representatives, promising that he would defer. the
nationalisation and not approve the schemes. The allegation was that he
later on backed out of his promise and granted approval to the schemes. G
So far as writ petitions of persons who had alleged that they had personally
passed on certain bribes to the Minister in question were concerned,' the
~ High Court has dismissed them on the ground that they had not come to
the court with clean hands. In other words, those objections were dismissed
in limine without the court considering the allegations made against the H
940 SUPREME COURT REPORTS [1992) 3 S.C.R.

A Minister on their merits. So far as the writ petitions which were allowed
were concerned, however, the High court came to the conclusion that the
approval of the schemes should be set aside on the following ground :

xxx xxx

B "there is a possibility of likelihood of bias and the proceedings
relating to enquiry by the Transport (Minister) are vitiated and
tainted with biased approach and the approval of the scheme
and the resultant G.Os. are illegal and invalid."

The iearned Additional Solicitor General appearing on behalf of the
c APSRTC submits that the High Court has erred in quashing the notifica-
tions approving the schemes for the reason above-mentioned. He points
out that one batch of writ petitions had been aismissed on a short ground
without entering into the merits of the allegations. In the other batch of
writ petitions with which we are concerned, there were only vague allega-
D tions of corruption. The concerned Minister had filed a counter affidavit
denying the allegations. The High Court did not take any evidence on the
+
issue and has just arrived at its conclusion of a likelihood of bias on the
following circumstances:

1. There were allegations of corruption by the operators;
E
2. These allegations were so serious that questions were raised in the }-
legislative assembly in regar~ thereto;

. 3. The allegations were also considered to be serious by the Chief
Minister, who initiated an enquiry against the Minister concerned by the
F Lok Ayukta; ·

4. The Minister had gone back on his promise and granted approval ·-tf
to the schemes apparently with a view to scotching the rumors of allega-
tions made against him.
G Counsel submits that these circumstances can hardly make out a case
of bias against the Minister. The allegations made by the transporters were
very vague and were not substantiated. The mere fact that there were
questions in the assembly cannot lend substance to the allegations in regard
to which no evidence has been recorded. The action of the Chief Minister
H in initiating proceedings against the Transport Minister by the Lok Ayukta
~
' '
S.R.T.C. v. GURIVI REDDY (RANGANATIIAN, J.} 941

were prompted by the consideration that the Transport Minister had joined A
the new Ministry, which had been formed in between deserting his leader-
-( ship. According to the writ petitioners they had paid mone)ts to the
Transport Minister for deferring the scheme of nationalisation, but it is
their own case that the Minister did not do this. The conclusion of the High
Court that the Minister backed.out of a promise that he had give;n is pur((ly
B
in the nature of a surmise and is unsupported by any evidence 01r material.
The Minister may very well have approved of the scheme in pursuance of
the Government's decision to nationalise the transport routes in1 this district
in public interest. Finally, the learned Additional Solicitor General points
oat that though the ~cheme had been approved by the Minister against
who:n the allegations had been· made, the actual gazette notifications we~e c
issued very much later, at a point of time when the Transport Minis_ter was
no longer in charge of the Ministry concerned. This indicates, says the
learned counsel, that he approval by the said Minister had been ratified by
the subsequent Government of which he was not a member.
D
-+ We have gone through the record and considered the contentions 6f
the learned Additional Solicitor General. There is some substance in his
contention. While no doubt there were wild allegations against the Mini-
. ster, they were not substantiated. One fact that stands out is that the
Minister did not do anything to oblige the transporters who are said t~
have given him illegal gratification. On the contrary, he acted contrary to E
their interests. His approval of the schemes could well have been motivated
-'( by his faith in the nationalisation policy rather than represent an attempt
to get out of an embarrassing situation created by the allegations made
against him as surmised by the High Court. This consideration apart, there
"""C was no specific material to substantiate the allegations of corruption
F
referred to or relied upon by the High Court. There is also the fact that
'
the approval was gazetted only almost a year later, after the concerned
~-
Minister went out of the picture. Having regard to all these considerations,'
we are of the opinion that the High Court's conclusion that the enquiry
and approval were biased and the scheme, therefore, should be quashed is
based on no material and cannot be sustained. I
G

We would also like to point out one further reason why the practical
y-, effect of the High Court's order should not be implemented. We have'
already referred to the interim orders passed by this Court on 6.12.85 and1
27.2.86. By these orders the State Government was permitted to act on the H
}

942 SUPREME COURT REPORTS (1992) 3 S.C.R.

A schemes and the operators, if aggrieved, were also given an opportunity of
applying to the Government for modification of the schemes. We are
)-
informed that the schemes have been in operation for the past six years
and more and no objections have been presented by the operators calling
for a modification of the scheme. The learned counsel for the appellant
also assures us that in case any applications are made to the Government
B for modifying the schemes they would be considered and disposed of on
merits. If we disturb the High Court's order, we will be now creating
complete chaos by restoring a situation which has ceased to exist more than
six years from now. This also is an aspect to be taken into consideration,
in our opiniqn, in disposing of these appeals.
c
Sri Kanta Rao, learned counsel for the respondents, urged that there
was inordinate delay in the approval of the schemes promulgated as early
as 1977 ~d that the APSRTC was not in a fit condition to ply buses on all
the routes on account of its bad management and poor financial position.
The contention as to the delay between 1977 and the first approval in 198~
D has been examined and rejected in the earlier writ petition. The delay
between 1983 and 1985 cannot, in the circumstances outlined earlier, be
+
considered to be unreasonable. The other objection voiced by counsel has
been considered and rejected by the Government. We therefore see no
..
substance in th~ contentions of the counsel for respondents.
E For the reasons above-mentioned, we are of the opinion that these
appeals should be allowed, and the approval of the schemes restored. The )-
interim order passed by us permitting the Government to implement the
schemes will continue to be in force until and unless modified in ap-
propriate proceedings. We direct accordingly. But, in the circumstances, ~

F we make no order regarding costs.

G.N. Appeals allowed.
~