Holding

The Transport Commissioner, being an official of Haryana Roadways, has a financial interest within the meaning of Section 68(2) and therefore cannot be appointed as Chairman of the Regional Transport Authority; the notification appointing him is void.

Summary

The Modern Co‑operative Transport Society Ltd., a private passenger‑transport operator, challenged the Haryana Government's notifications appointing the State Transport Commissioner as Chairman of the Regional Transport Authority (RTA), arguing that Section 68(2) of the Motor Vehicles Act, 1988 bars any person with a financial interest—whether as proprietor, employee or otherwise—in a transport undertaking from being a member of a State or Regional Transport Authority. The Court held that Haryana Roadways, a departmental transport undertaking, falls within the meaning of "undertaking" and that the Commissioner, as an employee and official directly connected with its management, possesses a financial interest within the wide meaning of the provision. Consequently, his appointment as Chairman of the RTA violated the mandatory bar of Section 68(2) and the third proviso, and the notification appointing him was quashed. The Supreme Court allowed the appeal, set aside the High Court's dismissal, and affirmed that the High Court erred in treating the challenge as academic.

Issues considered

Whether Section 68(2) of the Motor Vehicles Act, 1988 prohibits the appointment of a State Transport Commissioner, who is an employee of a government transport undertaking, as Chairman of a Regional Transport Authority.
Whether Haryana Roadways qualifies as a "transport undertaking" within the meaning of Section 68(2).
Interpretation of the term "financial interest" in Section 68(2) – narrow versus wide meaning.
Whether the High Court erred in dismissing the writ petition as academic.

Legislation cited

Motor Vehicles Act, 1988s. 68(2)

Subjects

Motor Vehicles ActSection 68financial interesttransport undertakingRegional Transport Authorityappointmentconflict of interestcooperative societyHaryana Roadwaysstatutory interpretation

Judgment

THE MOR MODERN CO-OPERATIVE TRANSPORT A
SOCIETY LTD.
v.
FINANCIAL COMMISSIONER AND SECRETARY
TO GOVT. HARYANA AND ANR.

JULY 9, 2002 B

[M.B. SHAH, BISHESHWAR PRASAD SINGH AND
H.K. SEMA, JJ.]

Motor Vehicles Act, 1988-Section 68(2):
c
Employee of State Transport Authority-Whether having financial
interest-Held, yes-Financial interest of an employee may not be direct-
However it includes the financial interest which he may have as an employee
of the Undertaking. D
Notification appointing employee of Transport Authority as Chairman/
Member of Regional Transport Authority-Validity of-Held, the words
employed in Section 68(2) are of wide amplitude and expressly include an
employee ofan Undertaking-Proviso to Section 68(2) debars such appointment
since he is an employee-Hence Notification quashed E
Legislative intention-Court to ascertain the intention by directing its
attention not n1erely to the clauses to be construed but to the entire statute-
Expression used in a Statute to be understood in a sense in which they best
harmonize with the object of the Statute and which effectuate the object of the
Legislature. F
Words and Phrases: 'Undertaking'-Meaning in the context of Section
68(2) of the Motor Vechicles Act.

Appellant, a Co-operative Society, carrying on business of public
transport under state carriage permit in the State of Haryana has G
challenged the Notification issued by the State Government-respondents,
appointing the Transport Commissioner as Chairman of the Regional
Transport Authority, on the ground that Notification was illegal in as much
as Section 68(2) of the Act was a complete bar to the appointment of the
employee of the State Government having financial interest in the
87
H
88 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A Government Undertaking as Chairman/Member of the Regional
Transport Authority (RT A). The Writ Petition was dismissed by the High
Court on the ground that the appellant had failed to show that in
consequence of such appointment the business of appellant was affected
adversely and that the challenge to Notification was purely academic and
B did not warrant exercise of writ jurisdiction by the High Court. Hence
appeal before this Court.

it was contended for the appellant, that the Transport Commissioner
etc. working in Haryana Roadways have a financial interest in it within
the meaning of Section 68(2) of the Act which expressly prohibits the
C appointment of such person as member of the State or Regional Transport
Authority; that the Haryana Roadways compete with private operators,
hence its employees are ineligible for appointment as members of Regional
Transport Authority and that having regard to the nature and extent of
powers of the authority, the legislature in its wisdom sought to exclude
any person having any financial interest in any Transport Undertaking
D from membership of the R.T.A. with a view to ensure its independent and
impartial functioning.

On behalf of the respondents, it was contended that the Transport
Commissioner has been appointed as the Chairman of the Authority in
accordance with law and has no personal interest, and that his
E appointment was in the interest of the undertaking to provide economical
and efficient transport service for the people at large.

Allowing the appeal, the Court

HELD: 1. High Court should have considered the challenge to the
F appointment of the ?fficials concerned as members of the Regional
Transport Authority on the ground of breach of statutory provisions. The
mere fact that they had not acted in a manner prejudicial to the interest
of the appellant could not lend validity to their appointment, if otherwise,
the appointment was in breach of statutory provisions of a mandatory
G nature. (95-F, G)

2.1. Sub-section (2) of Section 68 of the Motor Vehicles Act
mandates that no person who has any financial interest, whether as
proprietor, employee or otherwise in any transport undertaking shall be
appointed or continue to be a member of a Regional Transport Authority.
H Thus a proprietory concern also comes within the ambit of sub-section
MOR MOD. CO-OP TPT SOCTY. LTD. H FIN. COfvf1.1RANDSECTY TO GOVT 89
(2) of Section 68. 197-C-DI A

- 2.2. Even applying the dictionary meaning of the word
"undertaking", an entity such as the Haryana Roadn'ays, 'vhich is engaged
in the business of providing transport service to the people must be held
to be an "undertaking". The use of the "'ords ''any undertaking'~ also
makes it abundantly clear that the undertaking may be either a private B
undertaking or a Government or public sector undertaking including a
statutory corporation. Therefore, a State undertaking such as Haryana
Roadways is within the contemplation of sub-section (2) of Section 68 of
the Act. 197-G, H; 98-A!

Webster's Third New international Dictionary and ~Vords and Pharases
c
legally defined, Third Edition, referred to.

3.1. The expression financial interest is capable of a narro,ver as well
as a wider meaning. In the narrower sense it in1plies dire ... ~ personal benefit
of an economic nature. In the wider sense it may include any interest direct D
or indirect which a person has in relation to the finances Of the
undertaking. 198-BI

3.2. It is trite to say that the inten lion of the Legislature must be
found by reading the statute as a whole. The Court must ascertain the
intention of the Legislature by directing its attention not merely to the E
Clauses to be construed but to the entire statute; it must compare the
Clause with the other parts of the law, and the setting in which the Clause
to be interpreted occurs. The rule is of general application as even plainest

-. terms may be controlled by the context. Expression used in a statute should
ordinarily be understood in a sense in which they best harmonize with the F
object of the statute, and which effectuate the object of the Legislature.
Therefore, when two interpretations are feasible the Court will prefer that
which advances the remedy and suppresses the mischief as the Legislature
envisioned. (98-C-El

3.3. Having regard to the fact that the State undertaking competes G
with private operators in the business of providing transport service, the
Legislature advisedly has barred the appointment of any person as a
member of the Regional Transport Authority who has any financial
interest, whether as proprietor, employee or otherwise in any transport
undertaking, which must necessarily include a Government undettaking. H
90 SUPREME COURT REPORTS (2002] SUPP. I S.C.R.

A This is considered necessary with a view to ensure the impartial
functioning of the Regional Transport Authority which is envisaged by
the Act. (98-F-H)

3.4. Having regard to the !anguage of Section 68, the fact that the
Transport Commissioner has no personal financial interest in the State
B undertaking, is of no consequence. Section 68(2) in express terms refers
to a person having "any financial interest" as proprietor, employee or
otherwise in any transport undertaking. The words employed are of the
widest amplitude and expressly include an "employee" of an undertaking.
If a very narrow meaning is given to the expression "any financial
C interest", the word "employee" will be rendered redundant, because in
all cases it may be argued that an employee has no personal financial
interest in the undertaking and his interest, whatever it may be, financial
or otherwise, is his official interest and duty to protect the interest of his
employer, including his financial interest. The wide sweep of the language
employed in Section 68(2) particularly the use of the word "any" before
D "financial interest" leads to hold that the financial interest of the person
concerned need not be direct personal financial interest, but includes the
financial interest which he may have even as an employee of the
undertaking. (100-F-H; IOI-A)

E Krishna Bus Service Pvt. Ltd. v. State of Haryana and Ors., [1985) 3
SCC 711 and Ishwar Singh Bagga and Ors. v. State of Rajasthan, (1987) I
SCC IOI, referred to.

4.1. The express language of the Third proviso of sub-section (2) of
Section 68 clearly debars "an official connected directly with the
F management or operation of a transport undertaking" from being
appointed as a member, or continuing as a member, of the Regional
Transport Authority. Therefore, Section 68(2) read with third proviso
makes it explicit that an official of the State Transport Undertaking who
is directly connected with the management or operation of the transport
G undertaking is debarred from being appointed a member of Regional
Transport Authority. So far as the Transport Commissioner is concerned,
he is undoubtedly such an official, and moreover in the discharge of his
official duties he shoulders financial responsibility and is accountable to
the State Government in that regard. The conclusion is, therefore,
irresistible that he is a person who has financial interest in the transport
H undertaking within the meaning of that expression in Section 68(2) of the
MOR MOD. CO-OP TPT SOCTY. LTD. l'. FIN. COMMR AND SECTY TOGO VT. [BISHESHW AR PRASAD SINGH, J.] 9}

Act. (101-A-D( A
4.2. Transport Commissioner is an official of the Haryana
Roadways and has financial interest in that undertaking within the
meaning of that expression in Section 68(2) of the Act. The Notification
in so far as it relates to the appointment of Transport Commission~r as
Chairman, Regional Transport Authority must be quashed. (IOI-GI B
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6974 of
2001.

From the Judgment and Order dated 21.2.2000 of the Punjab 1-jigh C
Court in C.W.P. Nos. 7013 of 1998.

Ms. Rani Chhabra and Ms. Sudha Pal for the Appellant.

Neeraj Kumar Jain for J.P. Dhanda for the Responients.

The Judgment of the Court was delivered by
D

BISHESHWAR PRASAD SINGH, J. The core question which arises
for consideration in this appeal by special leave is whether the Transport
Commissioner of the State of Haryana has any financial interest within the
meaning of Section 68 (2) of the Motor Vehicles Act, 1988 in the Government E
Undertaking known as the Haryana Roadways so as to render him ineligible
for appointment as Chairman of the Regional Transport Authority. The
appellant had challenged by a writ petition the Notification dated March 27,
1998 whereunder the Transport Commissioner was appointed as Chairman of
the Regional Transport Authority. Since the aforesaid Notification was
superseded by a subsequent Notification of December 31, 1998 appointing F
the Secretary, Regional Transport Authority as Chairman and the Traffic
Manager of the Haryana Roadways as a member of the authority, apart from
a representative of the District Administration, the appellant amended the
writ petition and challenged the Notification of December 31, 1998 also. The
High Court of Punjab and Haryana dismissed the writ petition by its impugned G
judgment and order dated February 21, 2000. Later by a Notification dated
February 20, 200 I in supersession of the earlier Notification, the Transport
Commissioner of Haryana was again appointed as Chairman of the Regional
Transport Authority and the District Transport Officer to act as Secretary,
Regional Transport Authority of concerned region as member. Before us, the
counsel has challenged only the appointment of the Transport Commissioner H
92 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.

A as Chairman of the Regional Transport Authority and not the appointment of
the District Transport Officer who has been appointed to act as the Secretary
of the Regional Transport Authority.

The appellant herein is a cooperative society duly registered under the
Haryana Cooperative Societies Act. It deals in the business of passenger
B transport and for that purpose obtains stage carriage permits issued through
the Regional Transport Authority, Hissar. Presently, it holds one permit to
operate four return trips on Hansi - Bad Chhappar route which falls within
the District of Hissar.

C The case of the appellant pleaded in the writ petition was that the
Haryana Roadways is a department of the State of Haryana. It also carries on
business of providing passenger transport facility. It competes with private
stage carriage operators and owns and operates a fleet of motor vehicles. The
Haryana Roadways is also subject to the provisions of the Motor Vehicles
Act (hereinafter referred to as "the Act") and the rules framed thereunder.
D Stage carriage permits are issued by the concerned Regional Transport
Authority constituted under Section 68 of the Act.

It was contended that for about two decades the entire passenger transport
service in the State of Haryana remained nationalized and stage carriage
service was operated only by the State Transport Undertaking known as the
E Haryana Roadways. However, in the year 1993 by Notification issued under
Section l 00 of the Act, a provision was made for grant of stage carriage
pennits to private operators but cc,nfined to cooperative societies. Under the
Notification, the routes falling within the districts with not more than I 0
kilometers falling on the National or State Highways, were available for
F operation by cooperative societies. Accordingly, stage carriage permits are
being granted to cooperative societies under Chapter V of the Act by the
concerned Regional Transport Authorities of which the Transport
Commissioner, Haryana was, and again is, the Chairman. By Notification
dated March 27, 1998 the Government of Haryana in exercise of the powers
conferred by Section 68 of the Act, in supersession of its earlier Notification
G dated December 30, 1996 constituted Regional Transport Authorities for each
of the regions of Ambala, Hisar, Faridabad, Rohtak, Kamal and Rewari
consisting of Transport Commissioner as Chairman and Secretary, Regional
Transport Authority of the concerned region as member to exercise and '
discharge the powers and functions .conferred by or under Chapter V of the
H Act on such authorities in the areas specified in the Notification. The aforesaid
MOR MOD. CO-OP TPT SOCTY LTD. l'. FIN COMMR ANO SECTY TOGO VT [BISHESHW AR PRASAD S!NG\-1,J.J 93

Notification of March 27, 1998 was challenged by the appellant cooperative A
society on the ground that the Notification was illegal in as much as Section
68(2) of the Act was a complete bar to the appointment of the Transport
Commissioner as Chairman of the Regional Transport Authority, he being an
employee of the State Government having financial interest in the Govetnment
undertaking namely, Haryana Roadways, within the meaning of Section 68(2) B
of the Act. In the writ petition the High Court issued a show cause notice to
the respondents by order dated 5.12.1998. However, on 31.12.1998 another
Notification was issued in supersession of the Notification dated March 27,
1998 whereunder the Secretary, Regional Transport Authority of concerned
region was appointed as Chairman of the Regional Transport Authority and
the Traffic Manager concerned of the office of General Manager, Haryana C
Roadways at District Headquarters as member of the authority. Another
member was appointed who was a representative of the District Administration
to be nominated by the Deputy Commissioner concerned.

The High Court by the impugned judgment and order of February 21,
2000 dismissed the writ petition challenging the validity of the Notification D
dated 31.12.1998 on the ground that the appellant had failed to show that the
appointment of Traffic Manager as a member of the Regional Transport
Authority had adversely affected the business of the appellant. It was not
averred that the Regional Transport Authority consisting of Traffic Manager
as a member had passed any order adversely affecting the interest of the E
appellant or had acted in any manner prejudicial to their interest. Jn such
circumstances the High Court was of the opinion that the challenge to the
Notification was purely academic and did not warrant exercise of writ
jurisdiction by the High Court. On these findings the High Court did not
consider it necessary to examine the question as to whether the appointment
of Traffic Manager, working in the office of General Manager, Haryana F
Roadways as a member of the authority was illegal, being in breach of the
provisions of Section 68, particularly Section 68 (2) of the Act.

During the pendency of this appeal another Notification has been issued
by the Government of Haryana on February 20, 2001 supers~ding the
Notification dated 31.12.1998. Under the latest Notification the Transport G
Commissioner, Haryana has again been appointed the Chairman of the
Regional Transport Authorities, and the District Transport Officer concerned
as the Secretary of the Regional Transport Authority of the concerned region
as member to exercise and discharge the powers and functions conferred by
or under Chapter V of the Act. H
94 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A It was submitted before us by counsel appearing on behalf of the
appellant that the Transport Commissioner of the State of Haryana as well as
the Traffic Manager working in the office of the General Manager, Haryana
Roadways, though officials of the State of Haryana have a financial interest
within the meaning of Section 68(2) of the Act in the Transport Undertaking
owned by the State namely the Haryana Roadways. By express words, Section
B 68(2) of the Act prohibits the appointment of such a person as a member of
the State or Regional Transport Authority. The Haryana Roadways is a
department of the State of Haryana and is a competitor in the passenger
transport business. It competes with private operators and therefore, under
the Act its employees are ineligible for appointment as members of the
C Regional Transport Authority. The Regional Transport Authority exercises
powers and functions conferred on it under Chapter V of the Act which
includes inter-alia the power to grant stage carriage permits, suspend or even
cancel such permits. Having regard to the nature and extent of power~
conferred on the Authority, the legislature in its wisdom sought to exclud1..
any person having any financial interest in any transport undertaking from
D membership of the Regional Transport Authority with a view to ensure its
independent and impartial functioning.

The respondents on the other hand contended before us, as was
contended before the High Court, that the Transport Commissioner has been
E appointed as the Chairman of the authority in accordance with law. It is not
disputed that he manages the State undertaking namely, the Haryana
Roadways, but it is contended that he has no personal interest and it is only
the interest of the State that he protects. No doubt, the transport department
of the State runs the commercial wing known as Haryana Roadways which
has several depots. It is also clearly averred that the Transport Commissioner
F is overall incharge of the Haryana Roadways and is therefore intimately
connected with its management including accountability for its perfonnance
resulting in profit or loss, but all the same his interest is not personal and his
appointment is in the interest of better administration of the undertaking
which is run with a view to provide economical and efficient transport service
G for the people at large.

In their additional affidavit filed before this Court the same stand has
been reiterated. It is admitted that the passenger transport service is provided
to the people by the transport department of the Government. There are 20
depots each headed by a General Manager who is usually a Class - I Officer.
H The three senior most functionaries of the transport department are the Minister
MOR MOD. CO-OP TPT SOCTY LTD.\'. FIN COMMRAND SECTY TOGO VT. [BISHESHWARPRASAD SINGH, J.J 95

for Transport, Secretary Transport, and the Transport Commissioner. Various A
schemes have been notified whereunder, but for the routes specified therein,
all the passenger transport routes have been reserved for exclusive operation
by the Haryana Roadways. It is being run as a purely departmental entity
unlike other States where corporate entities have been constituted to provide
transport facility on coinmercial considerations.
B
The counter affidavits filed by the respondents make the factual position
clear that the Transport Commissioner is overall incharge of the State
undertaking whieh is departmentally managed. He is also accountable to the
government for its performance and the profits earned or losses suffered by
it. It logically follows that the Transport Commissioner carries the burden of C
financial accountability. The undisputed facts also establish that the private
operators provide transport service on the routes on which they are permitted
to operate, and though their competition with Haryana Roadways may be
limited, having regard to the fact that they operate fewer routes, the existence
of competition between the two cannot be denied. In these facts and
circumstances, the question whether the Transport Commissioner has a D
financial interest in the Haryana Roadways within the meaning of that term
in Section 68(2) of the Act falls for our consideration.

Unfortunately, the High Court did not consider the question which
directly arose before it, namely, whether the appointment of the Transport
Com1nissioner/Traffic Manager as Chairman/member of the Regional E
Transport Authority was not in breach of statutory provisions. The High
Court did not exercise its writ jurisdiction in the absence of any averment to
the effect that the aforesaid officers had misused their authority and acted in
a manner prejudical to the interest of the appellants. In our view the High
Court should have considered the challenge to the appointment of the officials p
concerned as members of the Regional Transport Authority on the ground of
breach of statutory provisions. The mere fact that they had not acted in a
manner prejudicial to the interest of the appellant could not lend validity to
their appointment, if otherwise, the appointment was in breach of statutory
provisions of a mandatory nature. It has, therefore, become necessary for us
to consider the validity of the impugned Notification said to have been issued G
in breach of statutory provision.

Section 68 of the Motor Vehicle Act empowers the State Government
to constitute a State Transport Authority and the Regional Transport Authorities
which may exercise the powers and functions conferred by or under Chapter H
96 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A V on such authority. Sub-section (2) is most relevant which reads as follows
'~(2) A State Transport Authority or a Regional Transport Authority
shall consist of a Chairman who has had judicial experience or
experience as an appellate or a revisional authority or as an
adjudicating authority competent to pass any order or take any decision
B under any law and in the case of a State Transport Authority, such
other persons (whether officials or not), being more than four and, in
the case of a Regional Transport Authority, such other persons
(whether officials or not), not being more than two, as the State
Government may think fit to appoint; but no person who has any
c financial interest whether as proprietor, employee or otherwise in any
transport undertaking shall be appointed, or continue to be, a member
of a State or Regional Transport Authority, and, if any person being
a member of any such Authority acquires a financial interest in any
transport undertaking, he shall within four weeks of so doing, give
notice in writing to the State Government of the acquisition of such
D interest and shall vacate office:
')
Provided that nothing in this sub-section shall prevent any of the
members of the State Transport Authority or a Regional Transport
•
Authority, as the case may be, to preside over a meeting of such
Authority during the absence of the Chairman, notwithstanding that
E such member does not possess judicial experience or experience as
an appellate or a revisional authority or as an adjudicating authority
competent to pass any order or take any decision under any law:

Provided further that the State Government may, -
F (i) where it considers necessary or expedient so to do, constitute the
State Transport Authority or a Regional Transport Authority for
any region so as to consist of only one member who shall be an
official with judicial experience or experience as an appellate or
a revisional authority or as an adjudicating authority competent
G to pass any order or take any decision under any law;

(ii) by rules made in this behalf, provide for the transaction of business
of such authorities in the absence of the Chairman or any other
member and specify the circumstances under which, and the
manner in which, such business could be so transacted:
H
MORMOD.CO-OP.TPT SOCTY.LTD. I'. FIN COMMRANDSECTY TOGOVf.(BISHESHWARPRASAOSINGH,J.] 97

Provided also that nothing in this sub section shall be construed A
as debarring an official (other than an official connected directly with
the manage1nent or operation of a transport undertaking) from being
appointed or continuing as a member of any such authority merely by
reason of the fact that the Government employing the official has, or
acquires, any financial interest in a transport undertaking".
B
It was argued before us by the respondents that Haryana Roadways is
neither a company nor a statutory corporation. It is run as a departmental
entity and is a wing of the department of transport. It was faintly urged that
since Haryana Roadways is neither a company nor a statutory corporation, as
is the case in other States, it cannot be considered to be an undertaking within C
the meaning of that term in sub-section (2) of Section 68. It being a
departmental entity, it was not an undertaking. The submission is devoid of
force and must be rejected. Sub-section (2) of Section 68 mandates that no
person who has any financial interest, whether as proprietor, employee or
otherwise in any transport undertaking shall be appointed or continue to be
a member of a Regional Transport Authority. The person concerned may be D
a proprietor, or an employee, or he may otherwise have financial interest in
the transport undertaking. Clearly a proprietary concern also comes within
' the ambit of sub-section (2) of Section 68. It is, therefore, futile to contend
that Haryana Roadways being a departmental agency is not an undertaking
for the purpose of sub-section (2) of Section 68. The question as to whether
it is an undertaking at all has to be answered having regard to the language E
...' of sub-section (2) of Section 68 and the legislative intent. In Webster's Third
New International Dictionary "undertaking" has been assigned the meaning
"The act of one who undertakes or engages in a project or business; the
business of an undertaker: a business, work, or project which one engages in
or attempts". In Words and Phrases legally defined, Third Edition F
"Undertaking has been defined thus: 'Undertaking' includes any trade, business
' or profession and, in relation to a public or local authority, includes any of
the powers or duties of that authority, and, in relation to any other body of
persons, whether corporate or unincorporated, includes any of the activities
of that body". Even applying the dictionary meaning of the word
"undertaking", an entity such as the Haryana Roadways, which is engaged in G

- the business of providing transport service to the people must be held to be
an "undertaking". The use of the words "any undertaking" also makes it
abundantly clear that the undertaking may be either a private undertaking or
a Government or public sector undertaking including a statutory corporation.
We have, therefore, no hesitation in holding that a State undertaking such as H
98 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R..

A Haryana Roadways is within the contemplation of sub-section (2) of Section
68 of the Act.

The next question which falls for consideration is what is the nature of
the "financial interest" contemplated by the said sub-section. The expression
financial interest is capable of a narrower as well as a wider meaning. In the
B narrower sense it implies direct personal benefit of an economic nature. In
the wider sense it may include any interest direct or indirect which a person
has in relation to the finances of the undertaking. Such an interest may be the
interest of an official who manages the finances of the undertaking or on
whom rests the burden of financial accountability. It is trite to say that the
C intention of the Legislature must be found by reading the statutes as a whole.
The Court must ascertain the intention of the Legislature by directing its
attention not merely to the Clauses to be construed but to the entire statute;
it must compare the Clause with the other parts of the law, and the setting
in which the Clause to be interpreted occurs. The rule is of general application
as even plainest terms may be controlled by the context. Expression used in
D a statute should ordinarily be understood in a sense in which they best
harmonize with the object of the statute, and which effectuate the object of
the Legislatur.e. Therefore, when two interpretations are feasible the Court
will prefer that which advances the remedy and suppress the mischief as the
Legislature envisioned. Keeping these principles in mind we shall now consider
E what meaning has to be given to the expression "financial interest" in sub-
section (2) of Section 68 of the Act.

Looking to the scheme of the Act it cannot be disputed that the Regional
Transport Authorities exercise powers and perform functions which are
conferred upon them by or under Chapter V of the Act. The power includes
F the power to grant stage carriage permits, attach conditions thereto, to
determine the duration of permits and their renewal, to transfer permits, the
cancellation and suspension of permits, grant of temporary permits etc. Having
regard to the fact that the State undertaking competes with private operators
in the business of providing transport service, the Legislature advisedly has
barred the appointment of any person as a member of the Regional Transport
G Authority who has any financial interest, whether as proprietor, employee or
otherwise in any transport undertaking, which must necessarily include a
Government undertaking. This is considered necessary with a view to ensure
the impartial functioning of the Regional Transport Authority which is
envisaged by the Act.
MOR MOD. CO-OP. TPT SOCTY. LTD.•'· FIN. COMMRAND SECTY TO GOVT. [BJSHESHWARPRASADSINGH,J.J 99

Counsel for the appellant drew support from the observations made by A
this Court in Krishna Bus Service Pvt. ltd v. State of Haryana and Ors.,
[1985] 3 SCC 711 where the appointment of the General Manager ofHaryana
Roadways to exercise powers of Deputy Superintendent of Police under the
Punjab Motor Vehicles Rules was challenged on the ground that it was
violative of the fundamental rights of the private motor vehicles operators
guaranteed by Articles 19(l)(g) of the Constitution. Upholding the challenge B.
the Court observed:-

"The General Manager of Haryana Roadways who is a rival in
business to the private operators of motor vehicles in the State and is
intimately connected with the running of motor vehicles cannot be C
expected to discharge his duties in a fair and reasonable manner. An
unobstructed operation of the motor vehicles by private owners
operating along the same route or routes would naturally affect the
earnings of the Haryana Roadways. There is, therefore, every
likelihood of his being overzealous in discharging his duties of
stopping a vehicle and in searching, seizing and detaining motor D
vehicles belonging to others and at the same time excessively lenient
in the case of vehicles belonging to his own department. If in
discharging his duties in the case of vehicles be)onging to others he
fails to give due regard to the interests of the owners thereof he
would be violating their fundamental right to carry 01) business in a E
reasonable way. lfhe is too lenient in inspecting the vehicl.ei belonging
to his own department, the interests of the traveling public at large
would be in peril. In both the cases there is a conflict between his
duty on the one hand and his interest on the other. Moreover
administration must be rooted in confidence and that confidence is
destroyed when people begin to think that the officer concerned is F
biased".

Counsel also relied on the observations made by this Court in Ishwar
Singh Bagga and Ors. v. State of Rajas than, [ t 987] 1 SCC I 0 I. That was a
case where employees of the State Road Transport Corporation were
empowered to exercise powers that can be exercised under Section 129-A by G
police officers who were empowered in that behalf. Their appointment was
challenged as being in violation of Article 19(1)(g). The challenge was upheld.
Though, the question involved in that case was whether an employee of the
State Road Transport Corporation was included in the expression 'other person'
in Section 129-A of the Act, some observations made in the judgment are H
100 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.

A apposite. It was observed :
"It is thus clear that the Corporation is one of the many operators
of the motor vehicles in the State though the fleet of the motor vehicles
>wned by it and the magnitude of the operations carried on by it may
be very large. The police officers who are empowered to exercise
B certain powers under the Act should exercise those powers in respect
of motor vehicles owned by the private operators and also in respect
of the motor vehicles owned by the Corporation. Negligence on the
part of the Transport Authorities, the Motor Vehicles Department and
the police officers in exercising their powers of supervision, inspection
c and control in respect of the motor vehicles of the Corporation leads
to grave public suffering and sometimes to disasters. They should not
take it for granted that the motor vehicles of the Corporation do not
need to be checked or inspected only because it is established by the
State Government. Omission on their part in discharging these duties
amounts to dereliction of public duty".
D
Relying on these observations, though made in a different context, it
was submitted that the Legislature had in mind the constitution of an impartial
Regional Transport Authority having regard to the powers and functions
conferred on it and with this objective in mind, an express provision was
made debarring from membership of the Regional Transport Authority such
E persons who had any financial interest in any transport undertaking.

Having regard to the language of Section 68 we are of the considered
view that the fact that the Transport Commissioner has no personal financial
interest in the State undertaking, is of no consequence. Section 68(2) in
express terms refers to a person having "any financial interest" as proprietor,
F employee or otherwise in any transport undertaking. The words employed are
of the widest amplitude and expressly include an "employee" of an
undertaking. If a very narrow meaning is given to the expression "any financial
interest" as contended by the respondents, the word "employee" will be
rendered redundant, because in all cases it may be argued that an employee
G has no personal financial interest in the undertaking and his interest, whatever
it may be, financial or otherwise, is his official interest and duty to protect
the interest of his employer, including his financial interest. The wide sweep
of the language employed in Section 68(2) particularly the use of the word
"any" before "financial interest" leads us to hold that the financial interest of
the person concerned need not be direct personal financial interest, but includes
H the financial interest which he may have even as an employee of the
MOR MOD. CO-OP. TPT SOCTY. LTD. v. FIN.CO~IMRA)'IDSF.:CTY TO GOVT. [BISHESHWARPRASADSINGH,J.]} Q}

undertaking. A
The third proviso of sub-section (2) of Section 68 affirms this conclusion.
The express language of the said proviso clearly debars "an official connected
directly with the management or operation of a transport undertaking" from
being appointed as a member, or continuing as a member, of the Regional
Transport Authority. Therefore, Section 68(2) read with third proviso makes· B
it explicit that an official of the State Transport Undertaking who is directly
connected with the management or operation of the transport undertaking is
debarred from being appointed a member of Regional Transport Authority.
So far as the Transport Commissioner is concerned he is undoubtedly such
an official, and moreover in the discharge of his official duties he shoulders C
financial responsibility and is accountable to the State Government in that
regard. The conclusion is, therefore, irresistible that he is a person who has
·financial interest in the transport undertaking within the meaning of that
expression in Section 68(2) of the Act. The same can be said of the Traffic
Manager who functions under the General Manager of the Haryana Roadways.
D
The appellants had originally challenged the Notification dated March
27, 1998, whereunder the Transport Commissioner was appointed as Chairman
of the Regional Transport Authorities. However, during the pendency of the
writ petition, since that Notification was superseded by another Notification
dated 31.12.1998 appointing the Secretary, Regional Transport Authority of
the concerned region as Chairman of the Regional Transport Authority, and E
the Traffic Manager concerned of the office of the General Manager, Haryana
Roadways concerned located at District Headquarters as member, the appellant
amended the writ petitions and challenged the later Notification. During the
pendency of this appeal the position as it existed when the writ petition was
filed, has been restored so far as the appointment of Chairman of the Regional F
Transport Authority is concerned, in as much as the Transport Commissioner
has again been appointed as Chairman of the Regional Transport Authority
by the Notification dated February 20, 2001. Since we have found that the
Transport Commissioner is an official of the Haryana Roadways and has a
financial interest in that undertaking within the meaning of that expression in
Section 68(2) of the Act, the Notification in so far it relates to the appointment G
of Transport Commissioner as Chairman, Regional Transport Authority must
be quashed. We may however record that counsel for the appellant did not
challenge before us the appointment of the District Transport Officer to act
as Member Secretary of the Regional Transport Authority.
H
102 SUPREME COURT REPORTS [2002) SUPP. 1 S.C.R.

A In the result, this appeal is allowed, the impugned judgment and order
of the High Court set aside and the Notification dated February 20, 2001
quashed in so far as it relates to the appointment of the Transport Commissioner
as Chairman of the Regional Transport Authorities. There will be no order as
to costs.

B S.K.S. Appeal allowed.