1954 (10) TMI 37 - SC - Indian Laws

Whether the appellants could claim any fundamental right under article 19(1)(g) of the Constitution which can be said to have been violated by the impugned legislation? Whether the Act has deprived them of any property which would attract the operation of article 31 of the Constitution? Held that - Appeal allowed. The Australian Constitution indeed has no provision like article 19(1) (g) of the Indian Constitution and it is certainly an arguable point as to whether the rights of individuals alone are dealt with in article 19(1) (g) of the Constitution leaving the freedom of trade and commerce, meaning by that expression only the free passage of persons and goods within or without a State to be dealt with under article 301 and the following articles. We have thus indicated only the points that could be raised and the possible views that could be taken but as we have said already, we do not desire to express any final opinion on these points as it is unnecessary for purposes of the present case. The result is that in our opinion the appeals should be allowed and the judgment of the High Court set aside A writ in the nature of mandamus shall issue against the respondents in these appeals restraining them from enforcing the provisions of the U. P. State Road Transport Act, 1951, against the appellants or the men working under them.

Issues Involved:
1. Discrimination under Article 14 of the Constitution.
2. Violation of fundamental rights under Article 19(1)(g) of the Constitution.
3. Validity of legislation under Article 31(2) of the Constitution.
4. Freedom of inter-State and intra-State trade under Article 301 of the Constitution.

Detailed Analysis:

1. Discrimination under Article 14 of the Constitution:
The appellants argued that the U.P. Road Transport Act discriminated against private bus operators in favor of the State, violating Article 14. The Court noted that mere differentiation does not violate equal protection if the classification is reasonable and related to the legislative objective. The classification of the State as distinct from private citizens in the context of creating a State monopoly was deemed rational and related to the Act's objective. The Court rejected the argument that the State ceases to function as a State when engaging in trade, emphasizing the modern concept of a welfare State.

2. Violation of fundamental rights under Article 19(1)(g) of the Constitution:
The appellants contended that the Act infringed their right to carry on their business under Article 19(1)(g). The Court acknowledged that the right to pursue any trade or business is guaranteed by the Constitution but noted that this right does not include the freedom to carry on trade anywhere without State regulation. The State has the power to regulate the use of public highways for trade purposes. The Court held that the legislation, which excluded private bus operators from the transport business, prima facie violated Article 19(1)(g). However, the Court considered whether this restriction could be justified under Article 19(6) as reasonable and in the interest of the general public. The Court found that the State failed to provide evidence that the monopoly would benefit the public or that the restrictions were reasonable, thus declaring the legislation void under Article 19(1)(g).

3. Validity of legislation under Article 31(2) of the Constitution:
The appellants argued that the Act deprived them of their property without compensation, violating Article 31(2). The High Court had held that deprivation without acquisition by the State did not attract Article 31(2). However, the Supreme Court, referencing earlier decisions, held that deprivation of business interests amounts to deprivation of property. The Act was found to conflict with Article 31(2) as it did not provide for compensation, rendering it invalid on this ground as well.

4. Freedom of inter-State and intra-State trade under Article 301 of the Constitution:
The appellants argued that the Act violated Article 301, which guarantees freedom of trade, commerce, and intercourse throughout India. The High Court had dismissed this contention, stating that Article 301 is concerned with the passage of goods and persons, not individual rights to carry on trade. The Supreme Court did not provide a final decision on this issue, as the Act was already declared unconstitutional on other grounds. However, the Court indicated that Article 301 might protect individual rights to trade, referencing the interpretation of similar provisions in the Australian Constitution.

Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's judgment. The U.P. State Road Transport Act, 1951, was declared unconstitutional for violating Articles 19(1)(g) and 31(2) of the Constitution. The Court issued a writ of mandamus restraining the respondents from enforcing the Act against the appellants. No order as to costs was made.

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