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In Gullapalli Nageswara Rao & Ors. vs. Andhra Pradesh
State Road Transport Corporation & Anr. [1959 Supp. (1) SCR
319] it was contended that the State by nationalisation of
the Transport Services, exercised its power in Chapter IVA
of the Motor Vehicles Act, 1939 and in effect and substance
authorised in law to effect the transfer of the business of
the citizens to the State or a Corporation owned or
controlled by the State, without paying full equivalent of
the compensation under Article 31(2). The acquisition was,
therefore, contended to be invalid. Repelling the
contention, the Constitution Bench of this Court had held
that Section enabled the Government to frame a scheme and
give effect to the approved scheme in respect of a notified
area of a notified route and stop the private operators from
entering on the notified route, from entertaining any
application for renewal of any other permit and from
cancelling any existing permit or modifying the terms of
existing permit so as to render the permit ineffective from
the specified date. The impugned provision was held to be a
regulated power conferred on the Transport Authority in the
interest of the public for efficient, economical and co-
ordinate regulated service offered by the STU. The business
of the private operators and the STU has nothing to do with
one another. They are two independent businesses carried on
under two different licenses. The contention that the scheme
enabled the nominee of the State to do the business and,
thereby, in effect and substance transfer the business on
the existing permit holders to the STU was held to be not
correct. The contention was held to be fallacious. It may be
by process of law that the existing permit holders are
precluded from doing their business and it also may be that
the STU carriers on a similar business. By no stretch of
imagination, in law it can be said that STU is doing
business carried on by previous permit holders by or on
behalf of the State. Accordingly, it was held that the State
has no control and it is not an acquisition on behalf of the
State. In Union of India vs. Sudhansu Mazumdar & Ors.
[1971]) Supp. SCR 244], on September 10, 1958 an agreement
was entered into between the Government of India and
Pakistan called the "Indo-Pakistan agreement". Item 3 of the
agreement related to transfer of group of villages lying
within the territory of India, known as Berubari Union No.
12 and it was accordingly transferred to Pakistan. It was
contended that it was an acquisition without compensation
violating Article 31(1) and (2) of the Constitution. This
Court by a Constitution Bench had held that in order to
constitute acquisition or requisition, there must be
transfer of ownership or of right to possession of any
property to the State or Corporation owned or controlled by
the State. It was held that the effect of the Constitution,
by the Constitution (9th Amendment) Act, 1960 by no stretch
of imagination could be regarded as transfer of Berubari
Union No.12 to Pakistan as transfer of the ownership or of
right to possession of any property of the respondents in
the State under Article 31(2) of the Constitution. The
Amendment Act, 1955 made it clear that mere deprivation of
the property, unless its acquisition or requisition was
within the meaning of clause (2A), shall not attract clause
(2) and no application to pay compensation will arise
thereunder. In Katra Education Society, Allahabad vs. State
of U.P. [AIR 1966 SC 1307 at 1311] the contention was that
Section 16F(4) of the U.P. Intermediate Education Act, 1921
violated their fundamental right under Article 14, 19 or 31
of the Constitution. It was contended that since the scheme
of management did not provide for any compensation, it was
ultra vires the Constitution. The Constitution Bench
rejected the contention by holding that the educational
authorities, after considering the representation of the
management, had the power to make recommendation after
selectmen. The power to appoint persons possessed of
prescribed qualifications vests in the institution. The
education authorities did not accept suitability of persons
selected by the management on the specified grounds, and
reasons therefor. It is only an exercise of the control
envisaged by the amendment of Section 16D(3) of the Act with
a view to prevent appointment of unqualified person. The
power under Section 16D(4) entrusted to the authorised
controller was merely of management. Management of
institution in respect of which Authorised Controller had
been appointed had to be conducted and carried out in
accordance with the directions given by the Authorised
Controlled. IT was held that the property did not vest in
the State but continued to remain the property of the
institution as Article 31(2A) saves such control and Section
31(2) has no application.