Dharmadhikari, J.@mdashPetitioner 1, which is a brand of an All India Corporation known as Akhil Bharatia Grahak Panchayat (hereinafter
called panchayat) and its office bearers and members have challenged the validity and /or legality and propriety of fare hike, effect by the State of
Maharashtra, in consultation with the State Transport Authority vide final notification dt. 5th Jan. 1981, fixing fares for the State carriages plying
within the municipal areas or in mofussil area, in exercise of the powers conferred upon it under S.43 of the Motor Vehicles Act.
2. By and large it is an admitted position that the Maharashtra State Road Transport Corporation is operating buses to the exclusion of other
private operators, excepting in certain parts of the State and qua some routes, where private bus operators are still permitted to ply their buses.
Thus, the State Transport Corporation has by now virtually eschewed competition and eliminated all private operators from the field except in
certain areas or on certain routes. So far as the city buses plying within the Municipal Corporation area are concerned, they are controlled by the
local authorities, or by MSRTC. Prior to the impugned notification, fare rise was sanctioned for the State Transport on or about 17th of Nov.
1975 and for Best on 25-9-1979. Thereafter it appears proposals were received by the State Government from the Maharashtra State Road
Transport Corporation (hereinafter called the MSRTC) for raising the maximum and minimum limits of fares in both the mofussil and city areas and
from the Best Undertaking, Pune Municipal Transport Undertaking, Kolhapur Municipal Transport Undertaking and Solapur Transport
Undertaking in respect of city areas. After these proposals were received, draft notifications were issued by the State Government on 2-10-1980
and 6th Oct. 1980 inviting objections. Petitioner 2, Shri V.S.Bapat, on behalf of himself and several other citizens filed an objection vide letter dt.
2nd July 1979. He also presented the case of the citizens at the hearing fixed by the Honourable Minister for Transport. It appears that the
objections raised by petitioner No.2 and others were negatived by the Honourable Minister by his order dated 24th Dec. 1980 and thereafter final
notifications were issued on 5th of Jan. 1981. As already observed, it is these final notifications fixing the maximum and minimum fares which are
challenged in this writ petition by the petitioners.
3. Shri Kalsekar, learned Counsel appearing for the petitioners contended before us that the respondent State Government has failed to follow the
condition precedent laid down by S. 43 of the Act, before issuing directions to the State Transport Authority regarding fixing of fares. According
to Shri Kalsekar, members of the public were not given a reasonable opportunity to raise objections to the draft notifications. No data or material
on the basis of which the proposals for fare hike were made, was ever disclosed to the petitioners. In substance there was no public hearing in the
eye of law or within the meaning of S. 43(1) proviso of the Act. He also contended that respondent No.4, Minister for Transport was not
competent to decide the issue of fare rise since MSRTC is a Government Undertaking which enjoys a virtual monopoly in running the State
carriages. Further, it appears that fare hike was proposed by the State Government itself. This being the position, the Minister for Transport, being
part and parcel of the State Government was ex facie disqualified from hearing the objections. Hearing of the objections by the Minister practically
amounted to deciding the matter by the proposer. This is contrary to the principles of natural justice. Therefore, the order passed by the Minister
and the notifications issued by the Government are wholly illegal. According to the learned Counsel there is nothing in S. 43 of the Act, which
makes it incumbent upon the Minister to be the sole arbiter of the issue regarding fixing of the fares and such a question should have been left to an
independent authority, such as Fare Commission consisting of experts and representatives of ""interest affected"" persons, which must include
representatives of commuters. He then contended that even otherwise it is quite clear from the order of the Honourable Minister that he failed to
apply his mind to various objections raised and has granted the fare hike mechanically at the instance of MSRTC and BEST. While doing so he
had not taken into consideration interest of the general public or advantages offered to the public. It was also contended by Shri Kalsekar that the
Honourable Minister committed an error in overruling the objections based on the provisions of the Bombay Motor Vehicles (Taxation on
Passengers) Act, 1958. According to the learned Counsel, the provisions of the said Tax Act are unconstitutional and are also discriminatory. It
makes invidious discrimination between the passengers travelling within the Municipal limits and those travelling outside municipal areas and the
reason given by the State for higher rate outside municipal limits, namely, that funds are needed for development of rural roads is merely a sham
excuse. Further, from the manner in which the levy is imposed, it is quite clear that it is a tax on gross income of the Transport Undertaking and is
therefore beyond the competence of the State legislature. He also contended that in any case MSRTC being entirely owned and controlled by the
State Government, the passenger tax receipts should form part and parcel of total earnings and the profits of the Undertaking. Such a burden
cannot be used to cripple down the viability of the Undertaking itself. He also contended that the representations made by respondent 3, MSRTC
or respondent Nos.6 and 7 Municipal Corporation of Greater Bombay or BEST Undertaking, that unless fares are increased, they would have
deficit budgets, are false representations, as they have underestimated the income and overestimated their expenditure. Additional depreciation
claimed over and above normal depreciation was wholly illegal, being contrary to the well established principles of accounting. At any rate, net
amount of additional depreciation cannot be permitted to be deducted from the profits of business. In support of this contention, he has placed
reliance upon the decision of the Supreme Court in Premier Automobiles Ltd. and Others Vs. Union of India (UOI), as well as the provisions of
the I-T Act. According to the learned Counsel by S. 23 of the Road Transport Corporations Act, a statutory obligation is cast upon the State or
Union Government to contribute towards working capital of the Undertaking. The Union Government and the State Government have failed to
carry out their statutory obligations and for their lapse on their part commuters cannot be penalised. MSRTC is under a statutory obligation to run
its undertaking on sound economic and business principles. Raising working capital by raising fares is not sound and economic business principle.
Further increase sanctioned is far in excess of the increase in the cost of fuel and other inputs. Respondent 3, MSRTC has consistently neglected to
take steps as suggested by the public undertaking committee in its successive reports for effecting economy and increasing efficiency. By effecting
economy and increasing efficiency MSRTC will be able to generate several crores of rupees. In this context, learned Counsel has placed reliance
upon the recommendations of the Paradasani Committee as well as Jain Committee. According to the petitioners in these reports specific measures
have been suggested to prevent pilferage etc. for effecting economy and improving efficiency. Instead of taking these steps MSRTC is taking
recourse to the fare hike which in substance amounts to putting premium on inefficiency, mismanagement and pilferage. So far as the BEST id
concerned, it is an Undertaking run by respondent 6. It is contended by Shri Kalsekar that it is quite clear from the records of previous nine years
that respondent No.6 Corporation was consistently misled by BEST administration by presenting deficit budgets and asking for fare hikes, when in
fact the Undertaking was making profits. The budget of BEST shows deficit since it is based on wrong method of calculation and due to inclusion
in its expenditure, the items like interest on internal funds, additional depreciation, excessive provision of contingency and payment to Bombay
Municipal Corporation under Ss. 460KK and 460LL of the Act. According to the learned counsel these provision viz. Ss. 460KK and 460LL are
ultra vires being violative of Art. 14 of the Constitution. According to the petitioners these provisions of the Act enable the BEST to create capital
by burdening passengers with periodical fare hikes, which is wholly unfair, unjust and arbitrary. It is also arbitrary since the B.M.C. only takes
profit without correspondingly contributing anything towards the losses. The petitioners also contended that under the Agreement with the World
Bank in May 1975 a loan of Rs. 22.5 crores was taken by the Municipal Corporation on that the provisions of Ss. 460 KK and 460LL will be
deleted. However the corporation has failed to carry out its obligation and therefore the World Bank has declined to give balance of Rs. 5 crores
towards the said loan. Though seven hundred buses were purchased from the World Bank loan, only 430buses are being used. The BEST
Administration is not disclosing its correct financial position to the Municipal Corporation, much less to the public at large. As per the correct
calculations, the BEST is running in profit. Further , if imposition of passenger tax is excluded from consideration, then fare hike is wholly
unnecessary.
5. It was also contended by the learned Counsel that every year several lakhs of rupees are paid to the Municipal Corporation and some amount
from profits is also set apart for welfare funds of Municipal Officers, servants and their families thus causing a severe drain on the BEST resources.
These are not permissible deductions from the gain of business under the Income Tax Act. According to him payment of interest on the amounts
advanced by the Municipal Corporation is an interest on internal funds and is therefore illegal and for this proposition he has placed reliance upon
the decision of the Supreme Court in The Workmen of William Jacks and Co. Ltd., Madras, Represented by the William Jacks and Company
Employees'' Union Vs. Management of William Jacks and Co. Ltd., Madras, .
6. On the other hand it is contended by Shri Paranjape, learned Counsel appearing for the State Government, MSRTC. Honourable Minister as
well as Advocate General, that the provisions of S. 43 of the Act are legislative in nature and therefore the principles of natural justice have no
application to it. If the State Government chooses to issue such directions, then it is obliged to follow the procedure prescribed by the Act and
nothing more. Under S.43 ,the interest of the passenger has no place as he does nit belong to ""interest affected"" category of persons. Section 43 of
the Act cannot take in its import a body of passengers, whose interest is contingent. Further association of passengers is wholly out of picture,
when directions are issued under S.43. Assuming that the petitioners were entitled to be heard, still they were not entitled to ask for data and
material on which proposals or findings are based. Further, from the material placed on record, including the objections raised by the petitioner 2,
it is more than clear that he was in possession of relevant material and data. The annual accounts of MSRTC are presented to the Legislature and
the reports on its working are also published in newspapers. As regards municipal Undertakings the same are presented to respective municipal
bodies, and are also available to general public. It is also contended by Shri Paranjape that revision in fares was sought mainly on account of
enormous increase in prices of HSD Oil, lubricants, spare parts, hike in wages etc., which had a crippling effect on the operation of every transport
undertaking. These were matters of common knowledge. This is the reason why no specific demand was ever made by the petitioners for the
copies of the proposals or the data and therefore it cannot be said that hearing or opportunity given to the petitioners was not adequate or was
merely a farce.
7. So far as the provisions of the Passenger Tax Act are concerned, it is contended by Shri Paranjape that under item 56 of List II of the 7th Sch.
the State Legislature is competent to enact such a legislation. Tax imposed is a tax on passenger and not on income of the operators. What is
provided in S. 3 of the Act is merely a method of calculation. The very wording of S. 3 makes it clear that it is a tax on passengers and has nothing
to do with the income of the operator. Operator only collects the tax and nothing more. Discrimination between the urban and rural areas is based
on intelligible differentia. In urban areas use of buses is repetitive. Urban commuters use buses at least twice a day, and expenditure incurred forms
substantial part of their monthly budgets. There is a difference in load of buses in rural and urban buses. Urban people have to pay additional taxes
to the Municipal Council such as wheel tax etc. Thus the classification made is wholly reasonable and cannot be termed as arbitrary. Dealing with
challenge to the provisions of Ss.460KK and 460LL of the Bombay Municipal Corporation Act, it is contended by Shri Paranjape that it is neither
alleged nor it is shown that the enactment is beyond the competence of the State Legislature. The said provisions are made in general interest of
Municipal Corporation. Further the rate of interest is controlled and is governed by the proviso to S. 115(1) of the Bombay Municipal Corporation
Act. The said section is not under challenge. Provisions of Ss. 460KK and 460LL are part and parcel of the scheme of revenue and expenditure
dealing with Bombay Electric Supply and Transport Fund. The said sections cannot be read in isolation and will have to be read with the whole
scheme. If so read, it cannot be said that the provisions are in any way arbitrary or illegal. So far as the argument relating to bias of the Honourable
Minister to hear the objection is concerned, it is contended by Shri Paranjape that under S. 43 of the Act, it is the State Government alone, which
can issue directions. MSRTC is an independent statutory corporation so also local authority undertakings. The Honourable Minister has no
personal interest in the matter. The Honourable Minister who heard the objection was in charge of the transport department as a whole and not of
MSRTC alone. Therefore, it cannot be said that he was in any way disqualified from hearing the objections. In support of this contention Shri
Paranjape has placed reliance upon the decision of the Supreme Court in Dosa Satyanarayanamurty etc. Vs. The Andhra Pradesh State Road
Transport Corporation, and T. Govindaraja Mudaliar Vs. The State of Tamil Nadu and Others,
8. Shri Singhvi, learned Counsel appearing for Respondents 6 and 7 adopted and supported the arguments advanced by Shri Paranjape.
According to him, the hearing contemplated by S. 43 cannot be equated with a long drawn process of trial before a Court of Law. Therefore, it is
not obligatory upon the authorities concerned to furnish the copies of the proposal or the data to the objector. Further by S. 460MM of the
Bombay Municipal Corporation Act, the General Manager is obliged to publish accounts in the official gazette every year. Such accounts are
placed before the BEST Committee as well as the Municipal Corporation also. Therefore, the petitioners very well knew that financial position of
BEST. The method of accounting followed by the BEST is perfectly legal and valid. The depreciation shown in the accounts and the proposal is
less than the depreciation permissible under the I-T Act. According to Shri Singhvi and Shri Paranjape, while exercising the writ jurisdiction, this
Court cannot sit in appeal over the decision of the State Government, nor can it act as super-auditor.
9. Section 43 of the Motor Vehicles Act, with which we are concerned in this writ petition reads as under:-
43.(1) A State Government having regard to -
(a) the advantages offered to the public, trade and industry by the development of motor transport, and
(b) the desirability of co-ordinating road and rail transport, and
(c) the desirability of preventing the deterioration of the road system, and
(d) the desirability of preventing uneconomic competition among motor vehicles,
may from time to time, by notification in the official gazette, issue directions to the State Transport Authority -
(i) regarding the fixing of fares and freights (including the maximum and minimum in respect thereof) for stage carries, contract carriages and public
carriers;
(ii) regarding the prohibition or restriction, subject to such conditions as may be specified in the directions, of the conveying or long-distance goods
traffic generally, or of specified classes of goods, by private or public carriers;
(iii) regarding the grant of permits for alternative routes or areas, to persons in whose cases the existing permits are not renewed in pursuance of
the provisions of sub-sec. (1D) of S. 68F, or are cancelled or the terms thereof are modified in exercise of the powers conferred by cl.(b) or cl.(c)
of sub-sec. (2) of S. 68F;
(iv) regarding any other matter which may appear to the State Government necessary or expedient for giving effect to any agreement entered into
with the Central Government or any other State Government or the Government of any other country relating to the regulation of motor transport
generally, and in particular to its co-ordination with other means of transport and the conveying of long-distance goods traffic;
Provided that no such notification shall be issued unless a draft of the proposed directions is published in the official gazette specifying therein a
date being not less than one month after such publication, on or after which the draft will be taken into consideration and any objection or
suggestion which may be received has, in consultation with the State Transport Authority, been considered after giving the representatives of the
interest affected an opportunity of being hear.
(2) The State Government shall permit, at such intervals of time as it may fix, the interests affected by any notification issued under sub-sec. (1) to
make representations urging the cancellation or variation of the notification on the following grounds, namely:-
(a) that the railways are not giving reasonable facilities or are taking unfair advantage of the action of the State Government under this section ;or
(b) the conditions have changed since the publication of the notification; or
(c) that the special needs of a particular industry or locality required to be considered afresh.
(3)If the State Government after considering any representation made to it under sub-sec. (2) and having heard the representatives of the interests
affected and State Transport Authority satisfied that any notification issued under sub-sec. (1) ought to be cancelled; or varied, it may cancel the
notification or vary it is such manner as it thinks fit.
This court had an occasion to consider the scope and ambit of these provisions in Pandharinath Raghunath Chowdhari v. Maharashtra State
Transport Corporation and another in Special Civil Appln. Nos. 1904 with 1825 of 1972 decided on 1/4th Dec. 1972by the Division Bench of
this Court consisting of Tulzapurkar and Shah JJ. After making a detailed reference to the various provisions of Motor Vehicles Act and the
decision of the Supreme Court in B. Rajagopala Naidu Vs. State Transport Appellate Tribunal and Others, ,THE Division Bench held that the field
of S.43 is purely administrative and the functions that could be performed thereunder are purely of administrative character. While dealing with
somewhat similar question, the Division Bench observed :-
Chapter IV of the Act has the caption: "" Control of Transport Vehicles""; in other words, the entire Chapter deals with the matters pertaining to
control of transport vehicles a subject ordinarily falling within the administrative purview of the State Government. S.42 which is the first section in
that Chapter indicates one method by which the State Government can control the transport vehicles by providing for the necessity of permits
which must be held by operators of motor vehicles to enable them to ply the same for the purpose of carrying passengers or goods. Then comes
S.43 which is the material section with which we are concerned. It confers powers upon the State Government to control road transport by motor
vehicles and sub-sec. (1) of S.43 provides that the State Government after having regard to the factors and matters contained in cls.(a) to (d) there
of and after following the procedure prescribed in the proviso thereto, can from time to time, by notification in the Official Gazette, issue directions
to the S.T.A. regarding matters which are mentioned in cls. (i ),(ii),(iii) and (iv). This is followed by Sec. 44 which confers power upon the State
Government to create certain authorities, such as S.T.A. and Regional Transport Authorities and under sub-sec (3) the S.T.A. is required to carry
out the directions issued to it by the State Government under S.43; further S.T.A. has been given power, in exercise and discharge of its junctious,
to issue directions to R.T.A. which R.T.A. are required to give effect to under sub- sec.(4) thereof. Sub-sec.(5) of S.44 also provides for further
delegation, in that it enables the State Transport Authority or any R.T.A., if authorised in that behalf by rules made under S.68 to delegate such of
the powers and functions to such authority or persons and subject to such restrictions, limitations and conditions are maybe prescribed by the said
rules. This group of Ss. 42,43,and 44 clearly indicates that the matters which are dealt with by these sections are matters which pertain to
administrative field. Reverting back to the provisions of S.43, as we have stated earlier, sub-sec. (1) thereof empowers the state Government, from
time to time, to issue directions to the S.T.A. in the first place, sub-sec. (1) speaks of directions being issued by the State Government, that too to
the S.T.A. and these directions could be issued from time to time as and when occasion arises or exigency demands. Besides, the topics covered
by cl.s (i),(ii),(iii) and (iv) regarding which directions could be given are topics of administrative character and that being on the directions which
could be issued in regard to such topics would normally be of administrative character. Sub-sec.(2) of S.43 provides for cancellation or variation
of the directions issued by such notification as a result of representations being entertained from interested or affected persons. This provision also
indicates that the directions which are contemplated under sub-sec.(1) regarding matters covered by cls. (i) to (iv) would be administrative
directions. In our view, therefore, apart from the observation of the Supreme Court to which we have already referred, on a consideration of the
scheme of the Act particularly the scheme of Chap. IV in which the relevant sections occur. It is also clear to us that the field covered by s.43 is an
administrative field and the directions that could be issued thereunder by the State Government to the S.T.A. would be directions of administrative
character. Therefore, it is not possible to accept Mr. Patil''s contention that the act of issuance of the impugned Notification under sub-sec.(i) of S.
43 containing directions as to the maximum rate of fares that could be charged by transport services for their stage carriages in the instant case,
partook the nature of any legislative function performed by the State Government but the said act in our view is clearly an administrative or
executive act on the part of the State Government.
In view of this binding pronouncement of the Division Bench, it is not possible for us to accept the contention of Shri Paranjape that the function
performed by the State Government under S.43 of the Act is legislative in nature. Even otherwise, in our view nothing turns on the question as to
whether the said function is administrative or legislative, so far as the controversy involved in this writ petition is concerned. Proviso to S.43(1)
clearly lays down that no such notification could be issued unless draft of the proposed directions is published in the official gazette specifying
therein date being not less than one month after such publication, on or after which the draft will be taken into consideration and any objections or
suggestion which may be received has, in consultation with the S.T.A. been considered after giving representatives of the interests affected an
opportunity of being heard. It is implicit in these provisions that the representatives of the interests affected persons have a right to raise objections
or make suggestion and of being heard before any directions are issued to the State Transport Authority. We find it difficult to accept the
contention of Shri Paranjape that the expression ""representatives of the interests affected"" will not include in its import representatives of
passengers or commuters. In support of his contention Shri Paranjape has placed reliance upon the provisions of S. 47 wherein a specific
reference is made to the association representing persons interested in the provisions of road transport facility and recognised in this behalf by the
State Government. According to Shri Paranjape representatives of passengers come into the picture only after general directions are issued under
S. 43 and not till then. What is the scope and ambit of these various provisions also fell for consideration of the Supreme Court in Sree Gajanana
Motor Transport Co. Ltd. Vs. The State of Karnataka and Others, wherein it was held by the Supreme Court that it is the State Government
which had the data and the legal power under S. 43(1) of the Act to fix rates etc. After the notification under S 43 it becomes a condition which
has to be automatically attached to the permit and the R.T.A. has no option in the matter. In other words the R.T.A. has to act merely mechanically
after considering the matter on which it has to form an opinion and take decision quasi-judicially. Therefore, it is quite obvious that it is the
directions issued under S. 43 of the Act, which finally decides the matter one way or other. To accept the contention of Shri Paranjape that the
passengers have no place in the matter of fixing of fares of Stage carriages, contract carriages and public carriers will be the negation of the whole
scheme. It will mean that though while fixing fares, the State Government is bound to take into consideration advantages offered to the public, the
representatives of the public will have no right to be heard or to raise objections. This argument, to use the expression of Bhagwati, J. in National
Textile Workers'' Union and Others Vs. P.R. Ramakrishnan and Others, sounds like a relic of a bye-gone age. If ultimately the advantages offered
to the public are relevant for deciding the maximum and minimum fares of Stage carriages, then the representatives of public must have a say
because they know best what is in public interest. They must have an opportunity of placing before the State Government the relevant material
having bearing upon fixing of fares. Such matters cannot be fairly decided by keeping the representatives of commuters or passengers out of
picture. As a matter of fact it is the tragedy of our democratic, welfare State that whenever any discussion about the interest of general public or
common man takes place, he is normally conspicuously absent or is kept out. He is only an onlooker or a sleeping partner and not a participant
though a silent sufferer. If in the matter of fare hike, passengers representatives have no right to raise objections or of being heard, then obviously
fares will be fixed only on the basis of material placed by one side. It will be a one way traffic. The expression ""representatives of the interests
affected"" as used in S. 43 does not mean the representatives of the vested interests who are co-conspirators. Such pressure groups have spun their
own impenetrable web of vested interests and are interested in fare hike only. It is true that in a welfare State the Government elected by the
people is expected to act as a watchman or a watch-dog so as t protect the common man from exploitation by the vested interests. However, it is
not enough to appoint a watchman. Ultimately who will ''watch the watchman'' is the vexed question. This function of keeping watch on the
watchman is carried out by vigilant non-political, non-profit voluntary organisations. Such organisations consists of public spirited citizens who have
taken up the cause of ventilating legitimate public problems. Such organisations represent the common man who on his own is unable to raise
objections or participate in such matters. Petitioner 1 before us is a society registered under the Societies Registration Act. It is non-political
voluntary organisation. Its members consist of public spirited citizens who are well versed in the subject. Therefore we have no hesitation in coming
to the conclusion that under the proviso to S. 43(1) of the Act representatives of general public, like the petitioner 1, are entitled to raise
objections, make suggestion and also place before the State Government the data and material which is relevant for deciding the question of fixing
fares. They are also entitled to be heard before any such directions are issued. What should be the nature of this hearing must obviously depend
upon the facts and circumstances of each case. Once it is held that the function or power exercised by the State Government under S. 43(1) is
administrative in nature, then it cannot be said that hearing contemplated should involve a long drawn process of judicial trial, nor the order passed
by the Honourable Minister overruling or accepting suggestions could be equated with the judgement of the Court. The principles of natural justice
cannot be imprisoned in a strait-jacket formula. As to what principles of natural justice will apply in a particular case must obviously depend upon
the facts and circumstances of each case and no general rule can be laid down in that behalf. However, it can safely be said that the opportunity of
being heard as contemplated by S. 43 of the Act must be a reasonable and effective and not a mere formality. Before fixing fares the State
Government is obliged to take into consideration the objections and suggestions which may be received. It is not that each any every individual is
given an opportunity of being heard. The opportunity is restricted to the representatives of interests affected. The fares are to be fixed in
consultation with the S.T.A. and it is obvious that such consultations must be real, effective and not illusory. In the present case it is apparent that
the S.T.A. was consulted. The representative of the petitioner association was also given a personal hearing by the Honourable Minister. The
Honourable Minister has also passed a reasoned order. However it was contended by Shri Kalsekar that this hearing was merely a farce since the
relevant material and data on the basis of which the Honourable Minister ultimately fixed fares was never disclosed to the petitioner at any stage. It
was also contended by the learned Counsel that such a material should be disclosed in the draft notification itself. We find it difficult to accept this
contention. The draft notification is not a complete Code in itself. In the very nature of things it cannot contain all the data or material. It is also not
possible to lay down as a general rule that the copies of the proposals or data should be supplied to everybody. However, in our opinion so as to
give a reasonable opportunity to raise reasoned objections or make useful suggestions, copies of such proposals, or basic material should be made
available for inspection, when asked for and copies should be supplied to representatives of interest affected when demanded. This is necessary to
give a reasonable opportunity of hearing to the representatives of interests affected. This is also necessary to make the hearing effective and
meaningful. However, in the present case, but for making a general statement it is nowhere stated in the petition or anywhere else that a specific
demand in that behalf was ever made. Further from the objections raised by petitioner 2 Shri V.S.Bapat, it is quite clear that he had in his
possession copies of balance-sheet and other relevant material. Annual accounts of MSRTC are presented to the legislature and we are informed
that the reports of its working are also published in newspapers. As regards the municipal undertaking the same are presented to respective
municipal bodies and are also available to the general public. Further as is clear from the affidavit filed by the Joint Secretary to the Government,
the revision in fares was sought mainly on account of enormous increase in prices of H.S.D. oil, lubricant, spare parts, hike in wages etc. These
were the matters of public knowledge, details of which were already known to the petitioners. From the bare reading of the objections raised for
and on behalf of the petitioners it is quite clear that they were in possession of necessary material. This being the position, it cannot be said that the
petitioners were not given a reasonable opportunity of raising objections or making suggestions or of being heard in the matter. Therefore, it is not
possible for us to accept this contention of Shri Kalsekar. From the order passed by the Honourable Minister, it is quite clear that all the objections
or suggestions received were duly considered. It is also clear from the said order that S.T.A. was already consulted and it had also expressed
opinion that there is full justification for allowing an increase in the existing fare structure. It had suggested the area of increase and had also drawn
the attention of the Government towards the report of the Jain Committee. Section 43(1) proviso casts an obligation upon the state Government to
act in consultation with the S.T.A. according to Shri Kalsekar the expression used is "" in consultation"" with S.T.A. According to the learned
Counsel in the present case order is not passed in consultation with S.T.A. and therefore it illegal. He has also paced reliance upon the decision of
Supreme Court in Union of India (UOI) Vs. Sankalchand Himatlal Sheth and Another, and has contended that this consultation means full and
effective consultation and not formal or unproductive consultations. However, it cannot be forgotten that expression used is ""in consultation with
and not ""with concurrence of"". Consultation with S.T.A. is made obligatory, since it consists of a chairman who has had judicial experience and
such other officials and non-officials, not being less than two. By their experience in the field they are in best position to consider the situation fairly,
competently and objectively. Therefore it follows that whole consulting the S.T.A., the State Government must male relevant data and material
available to it, on the basis of which S.T.A. can offer its reasoned opinion. The section has imposed a corresponding duty on S.T.A. to express its
opinion after considering all the data material placed before it. State Transport Authority is not only at liberty but is obliged to call for the relevant
data and materials, which are necessary to arrive at the proper conclusion. In Chandramouleshwar Prasad Vs. The Patna High Court and Others,
the Supreme Court had an occasion to consider the scope of Art. 233(1) of the Constitution wherein also expression ''in consultation with'' is used.
While interpreting these words, Supreme Court observed (at p.375) :-
Consultation or deliberation is not complete or effective before the parties thereto make their respective points of view known to the other or
others and discuss and examine the relative merits of their views. If one party makes a proposal to the other who had a counter proposal in his
mind which is not communicated to the proposer the direction to give effect to the counter proposal without anything more cannot be said to have
been issued after consultation.
These observations aptly apply to the present enactment also. The very object of consultation is to obtain the view of the person or body to be
consulted in order to arrive at some conclusion in respect of the matter on which the advice is sought. No doubt the best way to consult would be
to discuss the entire matter at a conference table so that there may be a full and fair exchange of views, but that is neither possible nor feasible in
many cases. In our view the requirement as to consultation would be duly fulfilled if the S.T.A. is supplied with all the materials and available on the
basis of which conclusion has to be reached and its opinion is sought on the points in issue after indicating how the State Government views the
matter. In the present case it is neither alleged nor shown that such a procedure was not followed. Therefore, it cannot be said, there was no real
or effective consultation with S.T.A.
10-11. It is not also possible for us to accept the contention of Shri Kalsekar that Honourable Minister was disqualified to hear and decide the
matter, on the ground of bias. MSRTC, though an agency of State, is an independent statutory corporation. BEST or other transport undertakings
are owned by the local authorities. The Minister is not interested in any of these Undertakings personally, nor he had any personal interest in them.
The statute in terms enjoins a duty upon the State Government to issue necessary direction. Under the business rules, the Minister of the concerned
Department is obliged to hear and decide the matter on behalf of the State Government. In Dosa Satyanarayanamurty etc. Vs. The Andhra
Pradesh State Road Transport Corporation, the Supreme Court pointed out the distinction between the official bias of an authority, which is
inherent in a statutory duty imposed on it and personal bias of the said authority in favour or against one of the parties. The Supreme Court further
pointed our that though under the provisions of the Act, the State Government has some control, it cannot be said either legally or factually that the
said Corporation is a department of a State Government. This being the legal position, there is no substance in this contention also.
12. So far as the challenge raised by the petitioner qua the provisions of Passenger Tax Act is concerned, we find no substance in the said
challenge also. Under Entry 56 of List II of Seventh Sch. the State Legislature is competent to frame an enactment of this nature. Nature and
quality tax would not depend on what measure is adopted for fixing the amount payable. The fact that tax is to be measured in proportion to the
fare and freight realised does not alter the nature of the tax nor it will affect its intrinsic character. Tax is levied on the passenger and not on the
income of the operator. The Supreme Court had an occasion to consider a somewhat similar challenge in A.S. Karthikeyan and Others Vs. State
of Kerala and Another, . In that case the provisions of Kerala Motor Vehicles (Tax on Passengers and Goods Amendment) Act were challenged.
In that case the Supreme Court had also made a reference to its earlier decisions reported in Sainik Motors, Jodhpur and Others Vs. The State of
Rajasthan, ; Rai Ramkrishna and Others Vs. The State of Bihar, and B. Srikantiah and Others Vs. The Regional Transport Authority, Anantapur
and Others, . However, it was contended by Shri Kalsekar that there is a world of difference between the provisions of Rajasthan and Kerala
Acts and the Bombay Motor Vehicles Act. We find no substance in this contention also. In substance the provisions are identical. From the bare
reading of the provisions of the Act. It is quite clear that it is a tax on passengers and not on income of the operators. Tax levied has nothing to do
with the income of the operator. Operator is only obliged to collect it. What is provided by S. 3 is the method of calculation and nothing more. It
also provides for an outer limit. The distinction made between the rates in urban and rural areas is also based on reasonable classification. It is
based on intelligible differentia, which had a rational nexus to toe object sought to be achieved by the statute. As observed by the Honourable
Minister in his order, this tax has been levied in order to mobilise resources for the developmental activities of the State. The nature of this tax is
also explained by the Supreme Court in the latest decision reported in B.A. Jayaram and Others Vs. Union of India (UOI) and Others, . In urban
areas use of buses is repetitive which is not the case in rural areas. There is a difference in load of buses and further in urban areas citizens are
obliged to pay some more taxes in the form of wheel tax etc. therefore it cannot be said that rates fixed are not based on any reasonable
classification or are arbitrary. As observed by the Supreme Court on A.S. Karthikeyan''s case, while fixing the fares under S. 43 of the M.V. Act,
the Government can take into account the tax imposed on passengers and such fares could be fixed either exclusive or inclusive of such tax.
13. For similar reasons the challenge to the provisions of Ss. 460KK and 460LL of Bombay Municipal Corporation Act must fail. The
competence of the State legislature to enact the said provisions is not challenged. Once it is held that the State Legislature had power to legislate on
the subject, then the legislative wisdom is not open to challenge. These provisions are challenged by the petitioners on the ground that they are
perverse and deny the citizen the protection of equal laws and, therefore, are contrary to Art. 14 of the Constitution. According to the petitioners
said provisions do not permit any surplus to be retained by BEST and the same is required to be transferred to Bombay Municipal Corporation
which in turn lends some money to BEST on interest. This method of charging interest on internal funds is illegal, and is also not in tune with sound
business principle. In support of this contentions, the petitioners have placed reliance upon the decision of the Supreme Court in The Workmen of
William Jacks and Co. Ltd., Madras, Represented by the William Jacks and Company Employees'' Union Vs. Management of William Jacks and
Co. Ltd., Madras, However, it cannot be forgotten that in the said case the Supreme Court was not concerned with the statutory provision which
specifically provides for the transfer of surplus balance to Municipal funds. Section 115 of the Bombay Municipal Corporation Act lays down that
in the case of an emergent necessity for funds and upon a representation by BEST Corporation may with the previous sanction of the State
Government, which may be given subject to such terms and conditions as to repayment and other matters as the Government thinks fit, authorise
the Commissioner to pay from Municipal fund into BEST fund such sums as may be specified, as temporary advance for meeting such
emergencies. The provisions of Ss. 460KK and 460LL cannot be read in isolation since they form part and parcel of the whole scheme, that is
Chapter XVI-A dealing with the Bombay Electric Supply and Transport Undertaking. If these provisions are read with other provisions of the Act,
harmoniously, it cannot be said that they are in any way arbitrary. Since the BEST is acting in accordance with the statutory provisions, it cannot be
held that in paying interest to Bombay Municipal Corporation, on the funds advanced, by Corporation, it is acting illegally or against the sound
business principle.
14. So far as the merits of the controversy are concerned, it is contended by the petitioners that while deciding the question of fare hike, 1980
should have been considered as a base year because till then, the MSRTC or BEST were not running in losses and the fare hike already granted in
the year 1975 was excessive. It was also contended that the method of accounting following by these Undertakings was wholly unscientific and
unbusinesslike and the additional depreciation claimed over and above normal depreciation was wholly illegal. According to the petitioners at any
rate, the amount of additional depreciation cannot be permitted to be deducted from the profits of the business. The petitioners have also made a
grievance that MSRTC consistently, neglected to take steps as suggested by the Public Undertaking Committee in its successive reports for
effecting the economy and increasing efficiency. This in substance amounts to disregarding its statutory obligation and therefore the burden of
inefficiency cannot be shifted on the passengers. By effecting economy and increasing efficiency MSRTC will be able to generate more than Rs.25
crores. Improving efficiency will mean saving of Rs.36 to 37 crores. The Petitioners have also contended that if the working of MSRTC is
compared with Gujarat State Road Transport Corporation, then it is quite clear that the working of MSRTC is not only unsatisfactory, but it is
being run as if it is an independent kingdom, meant for the benefit of the Members of Board and its employees unconcerned with public interest.
The petitioners have also drawn out attention towards the report of Public Undertaking Committee, wherein it was suggested that there is lot of
scope of reducing fuel consumption. There is lack of control in Central Stores which has resulted in increased expenditure on spare and other store
material. Material purchased is also of doubtful quality. In spite of recommendations of Public Undertaking Committee, experts on transport
management or automobile engineering etc, are not yet included on the Board of MSRTC and the office bearership of the Board is made a prized
post for conferring political favours. There is ample scope for economising on the expenditure made on these members by cutting their existing
fringe benefits. No norms for recruitment of employees, opening of new depots, starting of new routes etc. have been laid down which results in
inefficiency leading to uneconomic operation. The suggestions made by the Public Undertaking Committee qua town and city buses are also not
followed. According to the petitioners if recommendations of Paradasani Committee and Jain Committee are properly implemented. MSRTC can
be run on economic lines and in that case no fare hike was necessary. So far as the BEST is concerned, it is contended by the petitioners that the
proposals made by the Committee in August 1979 were not approved by the BEST Committee as well as the Standing Committee. The Chairman
of the Standing Committee had deprecated attempts on the part of the BEST Administration to present deficit budgets and ask for fare hike.
According to the petitioners for the last 9 years the Municipal Corporation was being misled by the BEST Administration by presenting deficit
budgets, when in fact there were surpluses for three years. The BEST Administration has always shown its estimated income to be much less than
the actual whereas the estimated expenditure is highly inflated. In spite of the objection by the Municipal Chief Auditors a provision is being made
every year for additional depreciation fund over and above the normal depreciation. Depreciation is also provided on new chassis long before they
are brought in use. Thus, in substance it is contended by the petitioners that by manipulating accounts MSRTC and BEST are showing losses and
deficits and are claiming fare hikes.
15. On the other hand it is contended by the respondents, including the State Government, that fare hike was claimed as a result of rise in the
prices of petroleum products and other material. As a result of further rise in the prices of petroleum products BEST would be required to spend
additional expenditure of Rs.250 lacs and MSRTC will be required to spend Rs.900 lacs in the accounting year 1981-82 itself. In the affidavit filed
on behalf of MSRTC it is contended that after the fare hike, there has been additional increase in price of diesel and other petroleum products from
13th January 1981 and 12th July 1981 involving an additional burden of Rs.16 crores per annum. Further due to settlement between the
employees and the management the Corporation has to provide another sum of Rs.17 crores per annum which was not in contemplation at the
time of fare hike. Additional burden of Rs.3 crores is there because of rise in prices of tyres and allied material after the present notification. Thus,
out of the additional revenue of Rs.48.52 crores, resulting from the fare hike, a sum of Rs.36 crores is wiped out on account of increase in prices
of diesel oil, tyres and allied material and settlement with the employees. Thus, even the present fare is not enough to cover the loss estimated. To
the similar effect is the affidavit filed by the BEST. So far as the provision regarding the additional depreciation is concerned, it is contended on
behalf of MSRTC that the formula adopted for calculating depreciation in the accounts of 3 rd respondent, is the original cost of vehicle multiplied
by the kilometres done during the year divided by the prescribed life of the vehicle. Additional depreciation is provided by taking actual cost of
new vehicles purchased during the year and deducting therefrom the amount of the original costs of vehicles which are fully depreciated and which
are replaced by new purchases during that year. Depreciation according to this method was less than even the depreciation allowed by the income
tax authorities. As a matter of fact the income tax rules entitle the 3rd respondent to substantial higher amount of depreciation than the one charged.
According to respondent 3, method of charging additional depreciation has not in any manner altered the position for hike in fares. The said
depreciation is also in conformity with the rules and regulations framed for the said purpose by the Government. So far as the BEST is concerned,
it is contended by respondents 6 and 7 that the Undertaking charged depreciation on its assets in two parts viz. on the original cost of asset and
other supplementary depreciation. It is an established practice of accountancy that depreciation is to be provided for replacement of the assets
which are being used. Principal assets of the BEST are its fleet of buses. If the depreciation is calculated on the original cost, it will be hopelessly
inadequate to serve the purpose of replacement of assets and this is why the Undertaking has for the past several years been providing for
supplementary depreciation. Even by adopting this practice, the total provision is largely short of replacing shortage. The BEST has also denied
that it has been deliberately presenting deficit budgets as alleged by the petitioners. For showing that the method of accounting followed by them is
in tune with the well established practice, the respondents have also placed reliance upon the book of Spicer and Peglar Book-keeping and
Accounts. They have also contended that because of increased price of petrol and other lubricants the present fare hike was a must. The
Respondents have totally denied several allegations made by the Petitioners. Thus the averments made in the petition, which are denied by the
respondents involve disputed questions of fact, which cannot be gone into in writ jurisdiction of this Court. It is well settled that while exercising
writ jurisdiction under Arts. 226 and 227 of the Constitution this Court cannot act as a Court of appeal, nor can it assume a role of super-auditor.
It is well known that cost structure of any mode of transport is made of three components: (a) operator''s cost; (b) user''s cost, and (c) social cost.
The social cost which is incurred in terms of noise, accidents, environmental pollution etc. lacks conceptual clarity and is generally difficult to
quantify. Therefore, it is normally excluded from consideration. We are also informed that conversion of financial cost into economic cost broadly
follows the guidelines laid down by Planning Commission. According to the petitioners these guidelines are also not followed in the present case.
However, as already observed power exercised by the State Government under S.43 of the Act is administrative in nature. Therefore, scrutiny by
this Court in its writ jurisdiction will be limited to testing as to whether the administrative action of the State Government has been fair and free from
the taint of unreasonableness or arbitrariness and whether the State Government has substantially complied with the norms of procedure prescribed
by the Act. It is contended by the petitioners that the State Government has acted arbitrarily while granting the fare hike. However it is apparent
from the order passed by the Honourable Minister that the fare hike was permitted as the cost of operation of service had increased tremendously
as a result of hike in prices of diesel, lubricant, spare parts, tyres etc. and in the staff cost. The Minister also took into account the fact that another
price hike in diesel prices was round-the-corner. In these circumstances, it cannot be said that the directions issued by the State Government were
in any way arbitrary. As to whether fare hike to the extent directed or permitted was necessary or not is a mute question which cannot be decided
in writ jurisdiction of this Court. It is not for the High Court to constitute itself into an appellate Court over the decision of State Government and to
resolve the dispute of this kind which is qualitatively different from ordinary civil disputes.
16. In the absence of relevant material or data it is also not possible to say that MSRTC is trying to raise working capital by taking recourse to fare
hike. By amending Ss.23 and 26 of the Road Transport Corporations Act, the Corporation is now authorised to augment its resources to enable it
to undertake developmental schemes etc. As already observed the present hike was sought due to rise in prices of diesel, lubricant, spare parts,
tyres etc. Thus the fare hike was asked because of increase in operator''s cost, and not for raising working capital as alleged.
17. However, we find much substance in the contention raised by the petitioners that the reports of the Public Undertaking Committees or
recommendations of Pardasani Committee or Jain Committee were not given proper considerations for reorganising the working of MSRTC.
These reports are not mere paper tigers. In his usual fairness, Shri Paranjape, learned Counsel appearing for the respondents, conceded that
everything is not well in the kingdom of MSRTC and there is much scope for improvement. The same is true about BEST Undertaking also. The
accounts of MSRTC are placed before the Legislature and in the case of BEST before Sub-committee and Municipal Corporation. These are not
mere empty formalities. The representatives of people, who in theory can be trusted to see that the interests of general public are protected are
expected to scrutinize these accounts and proposals. The State Government which is also the custodian of public interest is also expected to study
these reports, so as to find out as to whether price hike is really necessary or it will amount to a premium on inefficiency or mismanagement. These
Public Undertakings as well as the concerned authorities are also obliged to see that maximum will not become minimum and common men will not
become guinea-pig. If this is so then the general public will be within its right to expect that before making any proposal for fare hike hereafter, the
respondents will take into consideration the recommendations made by various committees. This is the least a common man can expect from the
public Undertakings which are run for his benefit. However, having regard to the material placed before us and the scope of our jurisdiction under
Arts. 226 and 227 of the Constitution it is not possible for us to come to the conclusion that the final notification issued by the State Government
are arbitrary or are wholly unwarranted. It was also conceded by Shri Kalsekar that an additional burden is cast upon the exchequer of these
public Undertakings because of rise in prices of petroleum products and spare parts etc., though according to him by curtailing wasteful
expenditure the respondents undertakings could have met this price rise and enhancement in fares to this extent was not necessary. Thus, it appears
that on this question also, two opinions are reasonably possible. Therefore, if the view taken by the respondents Undertaking or the State
Government is reasonably possible view of the matter, then also this is not a fit case for interference in the extraordinary jurisdiction of this Court
under Arts. 226 and 227 of the Constitution.
18. When the judgment was ready for delivery, Shri Kalsekar, learned Counsel for the petitioners produced before us a copy of the judgment of
Gujarat High Court in Spl. Civil Appln. No.1373 of 1979, Consumers Education & Research Centre, Ahmedabad v. State of Gujarat decided on
28-10-1983 and contended that for the reasons given therein, this writ petition should also be allowed. In substance, it is contended by Shri
Kalsekar that since the petitioners were not supplied with the copies of the representations submitted by the MSRTC, BEST and others for
revision of fares, the notifications issued are vitiated, being in contravention of the principles of natural justice. On the other hand it is contended by
Shri Singhvi and Shri Paranjape, learned Counsel for the respondents that having held that the nature of the function under sub-sec. (1) of S. 43 is
legislative, it is an error on the part of Gujarat High Court to come to the conclusion that proviso to sub-sec.(1) of S.. 43 requires compliance with
the principles of natural justice. In support of this contention, they have placed strong reliance upon the decision of the Supreme Court in Tulsipur
Sugar Co. Ltd. Vs. The Notified Area Committee, Tulsipur, and AIR 1981 1127 (SC) . It was also contended by the respondents that the
relevant material was in possession of the petitioners and the petitioners never made any demand in that behalf and in fact no prejudice was caused
to them on that ground. Further, Petitioner 1, who claims to be representative of interest affected persons had never lodged any objection to the
draft notification. The objections were lodged by Shri V.S.Bapat and others in their individual capacity and no demand for any material was made
by any of the petitioners before the actual date of hearing. In our view, the judgment of the Gujarat High Court is wholly distinguishable on facts. In
the case before the Gujarat High Court, initially the State Government had issued a notification u/s 43(1) of the Act. The Petitioners, the
Consumers Education & Research Centre had filed objections to the said notification and their representative had also attended the hearing held by
the State Government. For the reasons, which are not clear the State Government did not pursue the matter and withdrew their draft notification.
Thereafter the notification under S. 43(2) of the Motor Vehicles Act was issued. This draft notification was issued on the basis of the
representations made by the State Transport Corporation. Some correspondence had taken place between the Petitioners and the State
Government as well as the Corporation for furnishing the petitioners with the copies of the statements submitted by the Corporation for variation of
fares. Correspondence had also taken place between the State Government and the Corporation for appointing a rating committee to consider
whether the fares should be revised. The State Government had informed the centre that it had accepted in principle the establishment of rating
committee in respect of future proposals for fare hike. It also appears that the Government had expressed its inability to agree to the proposal of
Corporation incorporated in draft notification and had advised the Corporation to reconsider the matter in the context of the objections and
suggestions received and then approach Government with revised proposal. The Corporation had annexed to representation a note placed before
Corporation where three alternative fare structures were suggested. Admittedly the copies of these proposals were not supplied to the petitioners
in spite of specific demand and the Court also came to the conclusion that petitioners had no knowledge even of the substance of the proposal. In
these peculiar circumstances Gujarat High Court came to the conclusion that in the case before it there was denial of principles of natural justice
and fair play and the petitioners were denied an opportunity of effective hearing. Thus the finding in that behalf is based on the basis of facts and
circumstances brought on record and no general rule was laid down. In the case before us, the petitioners were in possession of all the material on
which proposals or representations were based. They have in fact dealt with the said proposals in their written submissions. The objections raised
are reproduced and dealt with in the speaking order passed by the Honourable Minister. Petitioners had never demanded the copies of these
proposals or representations. In these circumstances it cannot be said that there was any denial of principles of natural justice or fair play or they
had no opportunity of effective hearing or that any prejudice was caused to the petitioners. It is also not possible for us to accept such a challenge
in the present writ petition for one more reason. The Pune Municipal Transport Undertaking and Kolhapur and Solapur Municipal Undertakings
are not joined as parties to the petition. It is quite clear from the material placed on record that the proposals for fare hike were received by the
Government from them also. In this view of the matter, it will have to be held that the decision of the Gujarat High Court is not of any assistance in
deciding the controversy raised in this petition.
19. In the result, therefore, the petition fails. Hence the rule is discharged.
However, in the circumstances of the case, there will be no order as to costs.
Leave to appeal to Supreme Court orally prayed for. Leave refused.
20. Petition dismissed.