A) ABSTRACT / HEADNOTE

The judgment in H.C. Narayanappa and Others v. State of Mysore and Others, [1960] 3 SCR 742, marks a significant development in Indian administrative and constitutional law by validating state monopolies in public transport. The Supreme Court upheld a transport scheme framed by the State of Mysore under Section 68C of the Motor Vehicles Act, 1939, which sought to exclude private bus operators on select routes and vest the operation solely with the State Government. The petitioners—private operators—challenged the legality of the scheme under Article 32, asserting violations of Articles 14, 19(1)(g), and the purported incompetency of the state to enact such exclusionary measures. The Court categorically upheld the competence of Parliament to legislate in favour of state monopolies under Entry 21 of List III, and that such schemes constituted “law” under Article 13(3)(a) and were protected under Article 19(6). The decision also clarified that the rights under Article 19(1)(g) are subject to reasonable restrictions, especially in cases of state policy aimed at public welfare.

Keywords: State Monopoly, Motor Vehicles Act, Fundamental Rights, Article 19(1)(g), Public Transport Scheme, Article 32, Article 13(3)(a)

B) CASE DETAILS

i) Judgement Cause Title: H.C. Narayanappa and Others v. State of Mysore and Others

ii) Case Number: Petition No. 2 of 1960

iii) Judgement Date: April 28, 1960

iv) Court: Supreme Court of India

v) Quorum: B.P. Sinha, C.J., Jafer Imam, A.K. Sarkar, K. Subba Rao, and J.C. Shah, JJ.

vi) Author: Justice J.C. Shah

vii) Citation: [1960] 3 SCR 742

viii) Legal Provisions Involved:

• Motor Vehicles Act, 1939, Sections 68C, 68D, 68F, 68G

• Constitution of India, Articles 12, 13(3)(a), 19(1)(g), 19(6), 298, 32

• Seventh Schedule, List II Entry 26, List III Entries 21 and 35

ix) Judgments Overruled by the Case: None expressly overruled

x) Case is Related to Which Law Subjects: Constitutional Law, Administrative Law, Transport Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The petitioners were private stage carriage operators in the Anekal area, Bangalore District. The State of Mysore framed a scheme under Section 68C of the Motor Vehicles Act, 1939, reserving fourteen specific routes exclusively for the Mysore Government Road Transport Department, thereby excluding all private operators from those routes. The approval followed the statutory process, including inviting objections and conducting hearings.

The petitioners approached the Supreme Court under Article 32 alleging violation of their fundamental rights under Article 19(1)(g). They contended the scheme was discriminatory, created an unauthorized state monopoly, and lacked genuine procedural fairness. The Supreme Court’s interpretation and validation of the State’s action provided clarity on the intersection between administrative discretion, legislative competence, and fundamental rights.

D) FACTS OF THE CASE

On January 13, 1959, the General Manager of the State Transport Department published a scheme to exclude private operators from fourteen routes and reserved them for the state. The Chief Minister approved the scheme after hearing affected operators, and it was published in the Mysore State Gazette on April 23, 1959.

The affected petitioners were denied renewal permits and instead, permanent permits were issued to the government entity from June 24, 1959. The petitioners challenged this before the High Court, which ruled that the issuance was premature but did not invalidate the scheme itself. Subsequently, the Supreme Court entertained the writ petition under Article 32, focusing on constitutional questions raised by the petitioners.

E) LEGAL ISSUES RAISED

i) Whether Chapter IVA of the Motor Vehicles Act, 1939, permitted the State to create a transport monopoly to the exclusion of private operators?

ii) Whether Articles 19(1)(g) and 14 were infringed by the exclusion of private operators from certain routes?

iii) Whether the Chief Minister acted judicially and impartially in approving the scheme under Section 68D?

iv) Whether a scheme that excludes only some routes (and not all in a notified area) amounts to discriminatory and arbitrary treatment?

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that:

The scheme unjustly discriminated against private operators, covering only fourteen out of thirty-one routes in the Anekal area. The selective exclusion failed the equal protection mandate under Article 14. Further, certain operators were inexplicably spared from exclusion, indicating arbitrary classification [5].

They argued that Chapter IVA merely regulated the procedure for government entry into the transport business but did not authorize the state to exclude private competition without separate legislation by the State Legislature. Without such explicit authority, the scheme lacked legislative competence under List II, Entry 26.

Moreover, they asserted that the Chief Minister acted with bias, and did not evaluate the objections judicially, thereby violating the due process envisaged under Section 68D and natural justice principles.

Lastly, the petitioners argued the scheme violated Article 19(1)(g), as it arbitrarily deprived them of the fundamental right to practice their occupation of operating stage carriages.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that:

The scheme was validly framed under Section 68C, and that selective exclusion of routes does not amount to discrimination since Section 68C permits exclusion from “any area or route or portion thereof.” Thus, a route-specific scheme was legally permissible.

They argued that the Constitution (Seventh Amendment) empowered the State and the Union to carry on trade or business through Article 298. This power, reinforced by Article 19(6), allowed exclusion of citizens from certain industries if such exclusion was by law.

The State asserted that the Motor Vehicles Act, as amended, especially Chapter IVA, was a valid law under Entry 21 of List III, which dealt with “commercial and industrial monopolies.” This gave Parliament concurrent legislative competence to create such monopolies.

Regarding allegations of bias, the State rebutted with a sworn affidavit from the Chief Minister, stating he acted with judicial impartiality, provided opportunities for oral and written objections, and made a reasoned decision based on public interest.

H) RELATED LEGAL PROVISIONS

i) Motor Vehicles Act, 1939:

• Section 68C: Power to frame scheme for State undertaking

• Section 68D: Procedure for objections and approval

• Section 68F: Mandates issuance of permits in accordance with the scheme

• Section 68G: Compensation framework

ii) Constitution of India:

• Article 13(3)(a): Definition of law

• Article 19(1)(g) and 19(6): Right to practice profession and its exceptions

• Article 298: Executive power to carry on business

• Article 32: Remedy for enforcement of fundamental rights

iii) Seventh Schedule:

• Entry 21, List III: Commercial and industrial monopolies

• Entry 26, List II: Trade and commerce within the State

• Entry 35, List III: Mechanically propelled vehicles

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court held that Chapter IVA of the Motor Vehicles Act, 1939 validly empowered the State to exclude private operators on notified routes. The scheme was legally framed under Section 68C, and once approved under Section 68D, it constituted “law” within the meaning of Article 13(3)(a). Therefore, under Article 19(6), such a scheme did not infringe the fundamental right under Article 19(1)(g) [5].

ii) The Court ruled that Article 298 and Entry 21 of List III permitted Parliament to create state monopolies. It clarified that the term “monopolies” in the concurrent list includes creation, not merely regulation.

iii) The Court also held that selective exclusion of certain routes, rather than the whole area, was permissible under the Act. There was no discrimination as the scheme was route-specific and not area-wide.

iv) On the issue of bias, the Court found no evidence to support the claim. The Chief Minister acted judicially, gave opportunities for objections, and provided reasons for his decision.

b. OBITER DICTA 

i) The Court opined that statutory powers conferred to Government departments to hear objections and decide matters should be exercised judicially, even when the Government is a stakeholder. This preserves the integrity of administrative adjudication.

ii) The Court also noted that laws creating State monopolies in business are inherently consistent with the Constitution, if made in public interest.

c. GUIDELINES 

• A scheme under Section 68C can be route-specific and need not cover the entire area.

• State Governments, via administrative heads like the Chief Minister, must act judicially while approving transport schemes.

• Private operators must be notified and heard prior to exclusion.

• Bias cannot be presumed; must be supported by evidence.

• Article 19(6) permits exclusion of private citizens where a valid law authorizes the State to operate exclusively.

J) CONCLUSION & COMMENTS

This landmark ruling upheld state monopoly in public transport, confirming that economic policies framed for public welfare can override private commercial interests. The decision clarified legislative competence under the Seventh Schedule, the ambit of Articles 19(1)(g) and 19(6), and reinforced that administrative decisions affecting rights must be taken with procedural fairness. It also affirmed the Court’s willingness to balance economic justice with fundamental rights.

K) REFERENCES

a. Important Cases Referred

1. Navinchandra Mafatlal v. Commissioner of Income Tax, [1955] 1 SCR 829 [5]

2. Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation, [1959] Supp 1 SCR 319 [5]

3. United Provinces v. Atiqa Begum, [1940] FCR 110 [5]

b. Important Statutes Referred

1. Motor Vehicles Act, 1939, especially Sections 68C to 68G

2. Constitution of India, Articles 12, 13(3)(a), 19(1)(g), 19(6), 298, 32

3. Seventh Schedule of the Constitution, Entries 21 and 35 of List III, Entry 26 of List II