no private operator can operate his vehicle on any part or portion of a notified area or notified route unless authorized so to do by the term of the scheme itself. He may not operate on any part or portion of the notified Route or Area on the mere ground that the permit as originally granted to him covered the notified Route or Area (ADARSH TRAVELS).

Reportable

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4480 OF 1998

G.T. Venkataswamy Reddy …Appellant
VERSUS

State Transport Authority & Ors. …Respondents
With
C.A. No.4481/1998, C.A. Nos.7195-7197/2001, C.A. No.2782/2002, C.A.
No.7299/2002, C.A. No.3605/2003, C.A. No.3606/2003, C.A. No.3633/2003, C.A.
Nos.3731-3733/2003, C.A. No.3853/2003, SLP(C) Nos.22621-22622/2015

J U D G M E N T
Fakkir Mohamed Ibrahim Kalifulla, J.
This reference to this Constitution Bench was made by a Division Bench of
this Court in their order dated 22.07.2003 made in the case of R. Raghuram
Vs. P. Jayarama Naidu and others reported in 1990 (Supp) SCC 361, which
reference though was initially made to a Three Judges Bench, was
subsequently referred to the Constitution Bench by the Three Judges Bench
led by the Honourable The Chief Justice of India vide order dated
01.12.2004. As the issues raised and argued before us were common, on the
question referred, we heard arguments in common.

We heard the arguments of Mr. K.K. Venugopal, learned senior counsel for
the appellant in the C.A.No.3606/2003, Ms. Kiran Suri, learned senior
counsel for the appellant in C.A.No.4480/1998, Mr. A. Mariarputham, learned
senior counsel for the appellant in C.A.Nos.7195-7197/2001, Mr. Amit Singh
Chaddha, learned senior counsel for the appellant in C.A.3853/2003 and Mr.
Raju Rammachandran, learned senior counsel for the respondent(s) in
C.A.No.4480/1998.

Mr. K.K. Venugopal, learned senior counsel made his leading submissions,
followed by Ms.Suri and Mr. Chaddha as well as Mr. Mariarputham, learned
senior counsels for the appellants, while Mr. Raju Ramachandran, learned
senior counsel addressed arguments on behalf of the respondents in these
appeals.

Mr. K. K. Venugopal, learned senior counsel for the appellant in C.A.3606
of 2003 made a brief reference to the order dated 22.07.2003, by which the
present reference came to be made to the Constitution Bench and the
subsequent order dated 01.12.2004 as well. Learned senior counsel in his
submissions, fairly pointed out that the issue concerned in this reference
has to be considered by referring to the decisions reported in Karnataka
State Road Transport Corporation, Bangalore Vs. B.A.Jayaram and others –
1984 (Supp) SCC 244 (hereinafter referred to as ‘JAYARAM’), Pandiyan
Roadways Corporation Ltd. Vs. M.A.Egappan – 1987 (2) SCC 47 (hereinafter
referred to as ‘EGAPPAN’), Adarsh Travels Bus Service and another Vs. State
of U.P. and others – (1985) 4 SCC 557 (hereinafter referred to as ‘ADARSH
TRAVELS’), Karnataka State Road Transport Corporation, Bangalore Vs.
Karnataka State Transport Authority, Bangalore and others -1987 (Supp) SCC
648 (hereinafter referred to as ‘KSRTC’) and R.Raghuram (supra)
(hereinafter referred to as ‘RAGHURAM’).

The learned senior counsel made a detailed reference to the list of dates
commencing from 1963-64 when the initial permit in the case of appellant in
C.A.3606 of 2003 viz., permit No.13/63-64 for the Route Bangalore to Hosur
via., Madivala, Chandapura, Anekal, Thali, Denkanikottah and Keelamangalam
came to be issued, which permit was originally granted in favour of one Mr.
C. Rajasekaran and subsequently transferred to Smt. G. Kavitha Gopinath on
12.03.1998 and even thereafter transferred in favour of the present
appellant Smt. A.M. Kalaivani Ammal. The learned senior counsel also
referred to the application made by the appellant on 10.01.1985 to the
State Transport Authority (STA), Bangalore for grant of four additional
singles and one additional vehicle by the order dated 10.01.1985, the
Authority granted two additional singles with inclusion of one additional
vehicle. Thereafter by referring to the subsequent proceedings initiated at
the instance of the appellant, the learned senior counsel referred to the
order of the STAT, Madras as well as that of the order of the learned
Single Judge in C.R.P.No.553 of 1988 and the order of the Division Bench in
W.A.No.750 and 780 of 2002 dated 23.03.2002 pursuant to which the present
appeal came to be filed.
The learned senior counsel referred to Section 48(3)(xxi), Section 57(8)
and Section 63 of the Motor Vehicles Act, 1939 (hereinafter referred to as
“the Act”), which pertain to the statutory prescriptions concerning grant
of variation as well as the requirement for the counter signature
respectively. The learned senior counsel also fairly referred to the
provisions viz., Sections 68A, 68B, 68FF falling under Chapter IV-A of the
Act while making his submissions.

The learned senior counsel while formulating his submissions, contended
that the reference itself was based on incorrect provisions because, there
is no conflict or inconsistency between ‘JAYARAM’ and ‘EGAPPAN’ since the
existing permit in ‘JAYARAM’ was an exempted one on the Nationalized Route
and variation of that permit by added singles and additional bus was an
issue, while in ‘EGAPPAN’, the operator was not one of the persons exempted
under the Nationalized scheme and on the other hand he was operating on a
non-scheme route. The learned senior counsel then contended that ‘ADARSH
TRAVELS’ does not deal with Section 57(8) of the Act which concerns grant
of variations, but dealt with the interpretation of an existing scheme and
as to whether an operator on that Route could operate with corridor
restrictions. The learned senior counsel submitted that the ratio in
‘ADARSH TRAVELS’ being that the condition of the Scheme would cover the
rights of the operator and therefore the said case is not applicable to the
case on hand. As far as the case in ‘RAGHURAM’ is concerned, learned
senior counsel submitted that the said case was not of any consequence,
because the review petitioner in that case wrongly proceeded on the basis
as to what was included was an approved Scheme, while in fact it was only a
draft scheme, which would attract different consequence.

Lastly, he contended that the judgment in ‘JAYARAM’, ‘RAGHURAM’ and ‘KSRTC’
support the case of the appellant, which concerns grant of variation on a
nationalized Route, that the appellant was operating from 1965 and the
variation was granted in 1985 and, therefore, his operation should not be
disturbed in public interest.

Ms. Suri, learned senior counsel for the appellant in C.A.No.4480 of 1998,
after referring to the list of dates rightly formulated the questions as
under

Whether variation is permissible in a notified scheme route? and

Whether the Tamil Nadu Act disentitles counter signature of interstate
permit variation?

The learned senior counsel after making reference to ‘EGAPPAN’ judgment,
submitted that the appellant’s permit was covered by a draft scheme. As
regards the alleged conflict between ‘JAYARAM’ and ‘EGAPPAN’, the learned
senior counsel submitted that since the scheme was at the draft stage, the
position was different. As far as the implication of Section 68FF of the
Act was concerned, the learned senior counsel submitted that the same would
bar any grant of permit which would include variation by way of additional
singles or additional vehicles.

Mr. Mariarputham, learned senior counsel for the appellant in C.A.Nos.7195-
7197 of 2001, submitted that the question as regards the implication by
reason of the Tamil Nadu Act can be left open for consideration by the
regular Bench since the question referred to the Constitution Bench does
not cover the said issue.

Mr. Chaddha, learned senior counsel for the appellant in C.A.No.3853 of
2003 after making reference to the scheme concerning the case of the
appellant in that case, submitted that the said scheme does not cover the
case, in as much as the argument is that any interstate agreement even
entered subsequently, will stand excluded and by referring to the object of
the scheme in the case of the said appellant and after referring to the
relevant laws in the agreement, learned senior counsel sought to
distinguish the case of the appellant.

As against the above submissions, Mr. Raju Ramachandran, learned senior
counsel for the respondent in C.A.4480 of 1998 submitted that Section 68B
of the Act is the complete answer to the argument of the learned counsel
for the appellant in C.A.3853 of 2003. The learned senior counsel further
submitted that having regard to the implication of the provisions contained
in Chapter IV-A of the Act, the scheme is the law and if the scheme does
not permit any variation, then the same would not be permissible.

Having heard learned senior counsel for the appellants and the learned
senior counsel for the respondent, we proceed to answer the reference as
under.

By order dated 22.07.2003, the Division Bench of this Court after noting
the reference made in the case of R.Raghuram (supra) to a Constitution
Bench and on finding that later the matter was then referred to a three
Judge Bench, and subsequently before the three Judge Bench, the petition
itself abated on account of the death of the petitioner in that case and
since the conflict continued to remain in these cases, the matter was
referred to a Bench of three Judges. Subsequently, when the above appeal
along with the connected matters was listed before a three Judge Bench
headed by the then Hon’ble The Chief Justice of India, by an order dated
01.12.2004, the said Bench again referred the case back for hearing before
a Constitution Bench. That is how these appeals are listed before us.

When we refer to the order dated 22.07.2003, we find an apparent conflict
in the view of the law taken in ‘JAYARAM’ and ‘EGAPPAN’. It was also noted
therein that the Constitution Bench decision in ‘ADARSH TRAVELS’, wherein,
similar question came to be considered and decided was distinguished by a
three Judge Bench of this Court in ‘KSRTC’. The case which got abated was
reported in ‘RAGHURAM’. When we read the order dated 22.07.2003, which is
the order by which initially the reference came to be made to a three Judge
Bench which was subsequently referred to the Constitution Bench by the
subsequent order dated 01.12.2004, except making a reference to the
apparent conflict as between ‘JAYARAM’ and ‘EGAPPAN’ as well as the
distinction in ‘ADARSH TRAVELS’ made in ‘KSRTC’, there was no specific
terms of reference made in either of the two orders. However, when we
refer to the case which got abated viz., ‘RAGHURAM’, while dealing with an
identical issue, this Court while referring the review to a Constitution
Bench has specified the terms of reference which can be culled out and can
be taken as the Terms of Reference and the same reads as under:

“Whether on the publication of an approved scheme, the number of trips of
the vehicles of the existing operations can be increased both by number of
trips and vehicles by granting the variation of a permit even when the
existing operators are allowed to carry on their business as on the date of
the publication of the scheme”.

A little later we will refer to the relevant provisions, which necessitated
the said reference.

It is worthy to note that before formulating the said question for
reference to a Constitution Bench, the learned Judges culled out the ratio
decidendi in the Constitution Bench decision of ‘ADARSH TRAVELS’ and how
the case in ‘JAYARAM’ run counter to the said ratio and consequently, it
was held that the ruling in ‘JAYARAM’ was impliedly overruled in ‘ADARSH
TRAVELS’.

Keeping the said perception which weighed with this Court in ‘RAGHURAM’ to
make a reference to the Constitution Bench, we can discern from the said
order of reference that the conflict with reference to which the present
reference came to be made by the orders dated 22.07.2003 and 01.12.2004
were in all fours covered by the reference made in ‘RAGHURAM’ to the
Constitution Bench. Therefore, though the said reference stood abated
because of the demise of the appellant therein, the question of law
referred to the Constitution Bench rightly survived and the said question
requires to be answered in this reference.

In order to answer the above referred question, we have to make note of the
principles which were noted in the judgments reported in ‘JAYARAM’ (supra),
‘ADARSH TRAVELS’ (supra), ‘EGAPPAN’ (supra) – ‘KSRTC’ (supra) and
‘RAGHURAM’ (supra), apart from the relevant provisions falling under
Chapter IV and IV-A of the Act. We shall make a reference to the decisions
in the forefront before making a reference to the Statutory provisions and
thereafter analyze the question for consideration and render our decision.

Before doing so, at the very outset, we want to make it clear that we are
not dealing with any individual facts involved in these appeals as we are
not concerned with various intricated facts involved in the different
appeals. After we answer the reference all the appeals will be listed
before the regular Bench for disposal based on the answer to the question
referred before us. With that prelude, we proceed to first analyze the
decisions mentioned above.

‘JAYARAM’ (supra) is the starting point for this controversy, in which the
legal questions framed and the answer rendered can be set out. The
question considered by the said two Judge Bench decision in ‘JAYARAM’ has
been formulated in paragraph 9 which reads as under:

“9. On the above rival contentions, two main questions arise for our
consideration, namely,

(1) Whether sub-section (8) of section 57 creates a legal fiction by reason
of which the grant of an application for variation in the conditions of a
permit in respect of a matter set out in that sub- section results in the
grant of a new permit ?

(2) Whether an increase in the number of trips or the number of vehicles
above the maximum specified in an existing inter-State stage carriage
permit would be inconsistent with the provisions of the said Scheme ?”

Before answering the above questions the learned Judges made a detailed
reference to the various provisions contained in Chapter IV and IV-A of the
Act. Thereafter, by making a particular reference to Section 57(8) of the
Act, the learned Judges in their analyses observed as under in paragraph 15
:

“15. …….If the effect of sub-section (8) of section 57  were as contended
for by the Appellant, that is, if the said sub section (8) were to create a
legal fiction by which an application for variation of the conditions of a
permit of the nature referred to in that subsection is to be deemed to be
an application for the grant of a new permit and such variation when
granted would result in the grant of a new permit, then clearly by reason
of the prohibition contained in section 68-FF, the granting of such
application would be inconsistent with the provisions of the said Scheme
and would not be permissible in law. Considerable emphasis were placed on
behalf of the Appellant on the words “shall be treated as an application
for the grant of a new permit” occurring in the said sub-section (8) and on
the basis of this phraseology, it was submitted that an application for
variation of a condition of a permit referred to in subsection (8) of
section 57 was by a fiction of law put on the same footing as an
application for the grant of a new permit and it, therefore, followed as a
corollary that such an application if granted would result in the grant of
a new permit.”

Thereafter, the learned Judges referred to sub-section 1 to 10 of Section
57 of the Act in detail and then stated as under in paragraph 16:

“16. ……….Sub-section (8) comes immediately after sub- sections (3) to (7)
and when read in the context of these sub-sections and in juxtaposition
with them, it is clear that the legislative intent in enacting that
subsection was to prescribe the procedure to be followed when an
application for variation of the conditions of a permit referred to in that
sub-section is made, this procedure being the same as is laid down in sub
sections (3) to (7) with respect to an application for a new stage carriage
permit or a new public carrier’s permit. It is for the purpose of providing
that the procedure to be followed in the case of an application made under
sub-section (8) is to be the same as the procedure to be followed in the
case of an application for a new permit that sub-section (8) uses the words
“shall be treated as an application for the grant of a new permit.” By the
use of these words what sub-section (8) does is to incorporate in it the
provisions of sub- sections(3) to (7). This is a very different thing from
enacting a legal fiction………” (Underlining is ours)

While stating the law as above, the learned Judges sought reliance upon the
decision reported in M/s Shiv Chand Amolak Chand v. Regional Transport
Authority & Anr. – (1983) 4 SCC 433 wherein a similar conclusion was
arrived at while considering an application for variation by way of
extension of the route concerned covered by a scheme. The learned Judges
therefore took the view ultimately in paragraph 17:

“17……. Assuming, therefore, that an application for variation of the
conditions of a permit referred to in sub-section (8) of Section 57 is to
be deemed by a fiction of law to be an application for the grant of a new
permit the question to which we must address ourselves is for what purpose
is such an application for variation deemed to be an application for grant
of a new permit. Reading sub-sections (3) to (8) of Section 57 as a whole,
it is clear that the only purpose is to apply to such an application for
variation the procedure prescribed by sub-sections (3) to (7) of Section
57 and not for the purpose of providing that when the application for
variation is granted, the permit so varied would be deemed to be a new
permit……….” (Underlining is ours)

Having thus answered the first question by holding that application for
variation dealt with under Section 57(8) of the Act cannot be construed as
an application for a new permit, the second question was answered in the
said decision as under in paragraph 18:

“18. Even though when the condition of a permit is allowed to be varied on
an application made under sub-section (8) of Section 57, the permit so
varied is not a new permit, the question still remains whether in the case
of an existing inter-State permit exempted under the said Scheme an
increase in the number of trips or the number of vehicles allowed to be
operated under such a permit would be inconsistent with the provisions of
the said Scheme. We fail to see any inconsistency between an increase in
the number of vehicles or trips allowed under such a permit and the
provisions of the said Scheme. So far as the portions of the inter State
route covered by the said Scheme are concerned, the permits of the existing
permit-holders have been rendered ineffective. Further, by the said Scheme
as modified, the existing permit-holders are not allowed to pick up or set
down passengers on these portions of the notified routes. Whether one
vehicle or more traverse these portions or whether the same vehicle
traverses such portion more than once cannot any manner affect the services
operated by the Appellant on such portions since no passengers are allowed
to be picked up or set down or such portions. All that would happen is that
these vehicles, in the course of their inter-State operation would traverse
these portions of the notified routes without in any way operating as stage
carriages for such portions.”

Having thus noted the question posed and the answer rendered in the said
decision, what is to be further noted is that though a detailed reference
to the provisions contained in Chapter IV-A was made in the said decision,
before reaching the ultimate conclusion in paragraph 18, we find that there
was no discussion as to the overriding effect of Chapter IV-A on Chapter IV
as well as the freezing effect of Section 68FF of the Act under the scheme
with reference to the existing permit holders and their operations. We
therefore wish to deal with the said aspect in detail in the later part of
this judgment to find whether the said view expressed in ‘JAYARAM’ can be
approved or disapproved.

With that we come to the Constitution Bench decision in ‘ADARSH TRAVELS’,
the question posed for consideration is noted as under in the very first
paragraph which is to the following effect:

“…..The question for our consideration is, where a route is nationalised
under Chapter IV-A of the Motor Vehicles Act, whether a private operator
with a permit to ply a stage carriage over another route but which has a
common overlapping sector with the nationalised route can ply his vehicle
over that part of the overlapping common sector if he does not pick up or
drop passengers on the overlapping part of the route? The answer to the
question really turns on the terms of the scheme rather than on the
provisions of the statute, as we shall presently show.”

The Constitution Bench while dealing with the said question, made a
detailed reference to the provisions contained in Chapter IV-A and while
making reference to Section 68C of the Act, observed as under in paragraph
5:

“5. ……The policy of the legislature is clear from Section 68-C that the
State Transport Undertaking may initiate a scheme for the purpose of
providing an efficient, adequate, economical and properly coordinated road
transport service to be run and operated by the State Transport Undertaking
in relation to any area or route or portion thereof. It may do so if it is
necessary in the public interest. The scheme may be to the exclusion,
complete or partial, of other persons or otherwise. The scheme should give
particulars of the nature of the service proposed to be rendered, the area
or route proposed to be covered and such other particulars as may be
prescribed.”

Thereafter in paragraph 6 it was held as under:

“6. It is thus seen that while the provisions of Chapter IV-A are devised
to override the provisions of Chapter IV and it is expressly so enacted,
the provisions of Chapter IVA are clear and complete regarding the manner
and effect of the “take over” of the operation or road transport service by
the State Transport Undertaking in relation to any area or route or portion
thereof. While on the one hand, the paramount consideration is the public
interest, the interest of the existing operators are sufficiently well-
taken care of and such slight inconveniences to the travelling public as
may be inevitable are sought to be reduced to a minimum………” (Emphasis
added)

A further reference can be made to the emphasis made by the Constitution
Bench on the implication of Section 68C, Section 68D(3) and Section 68FF of
the Act in the light of the definition of the expression ‘Route’ in Section
2(28-A) of the Act in paragraph 7. It will be useful to refer to the said
part of the judgment which is to the following effect:

“7. A careful and diligent perusal of sec.68-C, sec.68-D(3) and sec.68FF in
the light of the definition of the expression ‘route’ in sec.2(28-A)
appears to make it manifestly clear that once a scheme is published under
sec.68-D in relation to any area or route or portion thereof, whether to
the exclusion, complete or partial of other persons or otherwise, no person
other than the State Transport Undertaking may operate on the notified area
or notified route except as provided in the scheme itself. A necessary
consequence of these provisions is that no private operator can operate his
vehicle on any part or portion of a notified area or notified route unless
authorised so to do by the terms of the scheme itself. He may not operate
on any part or portion of the notified route or area on the mere ground
that the permit as originally granted to him covered the notified route or
area….…………….……. The question is one of weighing in the balance the
advantages conferred on the public by the nationalisation of the route C-D
against the inconveniences suffered by the public wanting to travel
straight from A to B. On the other hand, it is quite well known that under
The guise of the so called ‘corridor restrictions’ permits over longer
routes which cover shorter notified routes or ‘overlapping’ parts of
notified routes are more often than not misutilised since it is next nigh
impossible to keep a proper check at every point of the route. It is also
well known that often times permits for plying stage carriages from a point
a short distance beyond one terminus to a point a short distance beyond
another terminus of a notified route have been applied for and granted
subject to the so-called corridor restrictions, which are but mere ruses or
traps to obtain permits and to frustrate the scheme. If indeed there is any
need for protecting the travelling public from inconvenience as suggested
by the learned counsel we have no doubt that the State Transport
Undertaking and the Government will make a sufficient provision in the
scheme itself to avoid inconvenience being caused to the travelling
public.” (Emphasis added)

The Constitution Bench ultimately answered the question posed by it by
holding as under in paragraph 8:

“8…… It is impossible to accept the argument that only the termini have to
be looked at and the rest of the highway ignored in order to discover a
route for the purposes of the Motor Vehicles Act. Equally without substance
is the plea that if an operator does not pick up or set down any passenger
between the two points of the common sector he cannot be said to be plying
a state carriage between these two points. The argument is entirely devoid
of substance for the simple reason that the operator does charge the
passenger for the distance travelled along the highway between these two
points also……..”

With that we shall now refer to the so-called conflicting judgment viz.,
‘EGAPPAN’ (supra). The facts in the said case are noted in paragraph 2,
which requires to be noted and the same is extracted as under:

“2. The facts of the case are these. On June 30, 1976, as stated earlier,
the approved scheme was published under Section 68-D of the Act in the
Tamil Nadu Government Gazette in respect of the route Madurai to Kumuli
authorising the appellant to run its stage carriages on that route. By that
approved scheme it was proposed to exclude completely all other persons
from operating their stage carriage services under permits covering the
entire route, referred to above except those persons mentioned in Annexure
II to the said scheme without prejudice to any future modifications,
variations etc. of their permits. The operators whose names had been
mentioned in Annexure II to the scheme were persons who were existing
operators on the different sectors of the notified route on the date of the
publication of the scheme. The respondent was not one of the those persons
who was running a stage carriage service on any part or sector of the route
in question on the date of its publication. Hence, his name was not
mentioned in Annexure II to the scheme. He was then operating a stage
carriage service under a permit issued under the Act on the route
Batlagundu to Usilampatti which was a non-scheme route. On February 28,
1981 he was able to secure the variation of the said permit from the
Regional Transport Authority which enabled him to operate on the route
measuring 21.4 Kms. from Usilampatti to Checkanurani, which formed a sector
of the notified route. The appeal filed against the said order was
dismissed and no revision petition was filed against the order dismissing
the said appeal. On 23.12.1982 he obtained from the Regional Trans- port
Authority a second variation of his permit under which he was authorised to
operate his stage carriage service over a distance of 16.6. Kms. from
Checkanurani to Madurai which was also a part of the notified route. An
appeal filed against that order was dismissed by the State Transport
Appellate Tribunal. A revision petition was filed under Section 64-B of the
Act (as in force in the State of Tamil Nadu) before the High Court. The
High Court dismissed the revision petition. This appeal by special leave is
filed against the above order of the High Court.” (Underlining is ours)

Thereafter, while dealing with the provisions contained in Chapter IV-A, it
was held as under in paragraph 4:

“4………… In the context in which Section 68-F(1-D) appears we find it
difficult to agree that the application for variation of a permit by
including the whole or any part of route in respect of which a scheme is
published under Section 68-C of the Act can be treated as falling outside
the mischief of Section 68-F(1-D) of the Act. There is no justification to
limit the application of Section 68-F(1-D) of the Act to only applications
for fresh permits or their renewal and to leave out applications for
variation of a permit by the inclusion of the route or a portion of the
route in respect of which a scheme is published. The fact that the
applicant is the holder of a permit to operate a stage carriage on another
route whose variation he is seeking by the inclusion of a route or a part
thereof in respect of which a scheme is published under Section 68-C of the
Act ought not to make any difference. The principle underlying Section 68-
F(1-D) of the Act is that the number of services on such a route should be
frozen on the publication of a scheme under section 68-C of the Act. It is
not, however, necessary for us to pursue the applicability of Section 68-
F(1-D) of the Act to the present case any further since it is brought to
our notice that the very same route is the subject-matter of the approved
scheme published under Section 68-D of the Act on June 30, 1976 to which we
have already adverted. The approved scheme, as mentioned earlier, excludes
the operation by others of stage carriage services on the above mentioned
route Madurai to Kumuli except those whose names are mentioned in Annexure
II attached thereto. The respondent is not protected by any provision in
the approved scheme itself. He cannot be permitted to operate on any sector
of the notified route in question in view of the provisions contained in
Sections 68-C, 68-D and 68-FF of the Act. The effect of these provisions
has been summarised by a Constitution Bench of this Court in Adarsh Travels
Bus Service and Another Vs. State of U.P. and Others, [1985] 4 S.C.C. 557.
Chinnappa Reddy, J. speaking for the Constitution Bench observed at page
566 thus:…..” (Emphasis added)

The very same paragraph which we have referred to in the Constitution Bench
was extracted and the law was declared to the effect that once an approved
scheme is published, the number of service on such a route is frozen on the
publication of the scheme under Section 68-C of the Act. It is also
worthwhile to note that the word of caution expressed in ‘ADARSH TRAVELS’
in para 7 of that judgment has been found to have been abused in ‘EGAPPAN’
by getting two variations by a non-scheme operator successfully and was
able to operate without any hindrance.

The last of the decision which requires to be noted in the present context
is the one reported in ‘KSRTC’ (supra). That was also a case where the
route was covered by an approved scheme under Chapter IV-A of the Act. The
respondents private operators applied for variation of the conditions of
their respective permits who were granted the variation, which resulted in
permission to operate more trips in an application filed under Section
57(8) of the Act. The High Court declined to interfere and this Court
after referring to the above referred to two judgments merely stated that
the law laid down in ‘ADARSH TRAVELS’ does not apply to the facts of that
case and without any discussion much less detailed discussion, dismissed
the appeal.

Having thus noted the various decisions covering this issue, we only wish
to make a detailed reference to Section 57(8) of the Act and some of the
provisions contained in Chapter IV-A of the Act viz., Section 68-B, 68-C,
68-D, 68-E, 68-F(1D) and 68-FF of the Act, which are as under:

“57(8) An application to vary the conditions of any permit, other than a
temporary permit, by the inclusion of a new route or routes or a new area
or, in the case of a stage carriage permit, by increasing the number of
trips above the specified maximum, or by altering the route covered by it,
or in the case of a contract carriage permit or a public carrier’s permit,
by increasing the number of vehicles covered by the permit, shall be
treated as an application for the grant of a new permit.

Provided that it shall not be necessary so to treat an application made by
the holder of a stage carriage permit who provides the only service on any
route or in any area to increase the frequency of the service so provided,
without any increase in the number of vehicles.”

*****

68B. Chapter IVA to over ride Chapter IV and other laws:- The provisions of
this Chapter and the rules and orders made thereunder shall have effect
notwithstanding anything inconsistent therewith contained in Chapter IV of
this Act or in any other law for the time being in force or in any
instrument having effect by virtue of any such law.

68C. Preparation and publication of scheme of road transport service of
State transport undertaking. Where any State transport undertaking is of
opinion that for the purpose of providing an efficient, adequate,
economical and properly coordinated road transport service, it is necessary
in the public interest that road transport services in general or any
particular class of such service in relation to any area or route or
portion thereof should be run and operated by the State transport
undertaking, whether to the exclusion, complete or partial, of other
persons or otherwise, the State transport undertaking may prepare a scheme
giving particulars of the nature of the services proposed to be rendered,
the area or route proposed to be covered and such other particulars
respecting thereto as may be prescribed, and shall cause every such scheme
to be published in the Official Gazette and also in such other manner as
the State Government may direct.

68D. Objection to the scheme. (1) On the publication of any scheme in the
Official Gazette and in not less than one newspaper in regional language
circulating in the area or route which is proposed to be covered by such
scheme,-

(i) any person already providing transport facilities by any means along or
near the area or route proposed to be covered by the scheme;

(ii) any association representing persons interested in the provision of
road transport facilities recognised in this behalf by the State Government
; and

(iii) any local authority or police authority within whose jurisdiction any
part of the area or route proposed to be covered by the scheme lies, may,
within thirty days from the date of its publication in the Official
Gazette, file objections to it before the State Government.

(2) The State Government may, after considering the objections and after
giving an opportunity to the objector or his representatives and the
representatives of the State transport undertaking to be heard in the
matter, if they so desire, approve or modify the scheme.

(3) The scheme as approved or modified under sub-section (2) shall then be
published in the Official Gazette by the State Government and the same
shall thereupon become final and shall be called the approved scheme and
the area or route to which it relates shall be called the notified area or
notified route :

Provided that no such scheme which relates to any inter-State route shall
be deemed to be an approved scheme unless it has been published in the
Official Gazette with the previous approval of the Central Government.”

68E. Cancellation or modification of scheme:- (1) Any scheme published
under sub-section (3) of section 68D may at any time be cancelled or
modified by the State transport undertaking and the procedure laid down in
section 68C and section of 68D shall, so far as it can be made applicable,
be followed in every case where the scheme is proposed to be cancelled or
modified as if the proposal were a separate scheme:

Provided that the State Transport Undertaking may, with the previous
approval of the State Government, modify without following the procedure
laid down in section 68C and section 68D, any such scheme relating to any
route or area in respect of which the road transport services are run and
operated by the State Transport Undertaking to the complete exclusion of
other persons in respect of the following matters, namely:-

(a) increase in the number of vehicles or the number of trips;

(b) change in the type of vehicles without reducing the seating capacity ;

(c) extension of the route or area, without reducing the frequency of the
service ; or

(d) alteration of the time-table without reducing the frequency of the
service.]

(2) Notwithstanding anything contained in sub-section (1), the State
Government may, at any time, if it considers necessary in the public
interest so to do, modify any scheme published under subsection (3) of
section 68D, after giving,-

(i) the State Transport Undertaking, and

(ii) any other person who, in the opinion of the State Government, is
likely to be affected by the proposed modification,’

an opportunity of being heard in respect of the proposed modification.

68F(1-D) Save as otherwise provided in sub-section (lA) or subsection (lC),
no permit shall, be granted or renewed during the period interevening
between the date of publication, under section 68C of any scheme and the
date of publication of the approved or modified scheme, in favour of any
person for any class of road transport service in relation to an area or
route or portion thereof covered by such scheme :

Provided that where the period of operation of a permit in relation to any
area, route or portion thereof specified in a scheme published under
section 68C expires after such publication, such permit may be renewed for
a limited period, but the permit so renewed shall cease to be effective on
the publication of the scheme under sub-section (3) of section 68D.]

*****

68FF. Restriction on grant of permits in respect of a notified area or
notified route, Where a scheme has been published under sub-section (3) of
section 68D in respect of any notified area or notified route, the State
Transport Authority or the Regional Transport Authority, as the case may
be, shall not grant any permit except in accordance with the provisions of
the scheme;

Provided that where no application for a permit has been made by the State
Transport Undertaking in respect of any notified area or notified route in
pursuance of an approved scheme, the State Transport Authority or the
Regional Transport Authority, ‘as the case may be, may grant temporary
permits to any person in respect of such notified area or notified route
subject to the’ condition that such permit shall cease to be effective on
the issue of a permit to the State Transport Undertaking in respect of that
area or route.”

At this juncture, it is necessary to state that in the decision in
‘JAYARAM’ and ‘ADARSH TRAVELS’, this Court has extensively covered the
scheme of the provisions contained both under Chapter IV as well as Chapter
IV-A of the Act. Therefore, the said part of the above referred to
decisions can be noted and followed without making any further reference to
the scheme of the provisions contained in those chapters. However, for the
purpose of deciding this reference, it is necessary for us to refer to the
above provisions which we have extracted and analyse the prescriptions
contained in those provisions in order to give our answer to the questions
referred.

(i) In the first instance, we take up sub-section (8) of Section 57 of the
Act. A close reading of the said sub-section shows that an application for
variation of any permit in the case of a stage carriage, for the purpose of
increasing the number of trips as well as number of vehicles covered by the
permit, with which we are concerned, mandatorily to be treated as an
application for the grant of a new permit. Going by the caption of Section
57 of the Act, one may tend to think that it is merely a procedure when
anyone apply for grant of permit, which includes stage carriage permit.
But, when we make a close reading of the sub-sections (1) to (7), we can
presently demonstrate how such provisions mandates compliance of various
specific requirements, which are intricately connected, with the grant of a
new permit, which are to be ‘mutatis mutandis’ to be complied with even in
respect of an application for variation, which is governed by sub-section
(8). Sub-section (2) stipulates that an application for variation in a
stage carriage permit should be made not less than six weeks before the
date on which it is desired that the permit shall take effect. Therefore,
when an application for variation like the present one with which we are
concerned viz., increasing the number of trips or increasing the number of
vehicles, the applicant must specify the date from which he desires such
variation to take effect and that filing of the application should be
mandatorily made by giving not less than six weeks time gap from the
desired date of the applicant for the varied condition to take effect.

(ii) Under sub-section (3), once the Regional Transport Authority receives
an application for variation of a stage carriage permit, statutorily the
Authority should make the application available for inspection at the
office of the Authority and should also publish the application or the
substance of it in the manner prescribed under the Rules together with the
notice of the date before which representation in connection with such
application for variation should be submitted. In that respect, period of
30 days should be prescribed by the Regional Transport Authority from the
date of the publication apart from specifying the time and the place where
the application along with the representation whatever received would be
considered by him. We are not concerned with the proviso to sub-section
(3) which has nothing to do with the consideration of an application for
variation.

(iii) When we refer to sub-section (4), here again we find that the
mandatory requirement for consideration of any representation made in
connection with an application for variation, should have been submitted
before the appointed date and also ensured that a copy of such
representation was simultaneously furnished to the applicant who applied
for the variation.

(iv) Under sub-section (5) when any representation as provided for in sub-
section (3) is made as stipulated under sub-sections (3) and (4), then it
is mandated on the Regional Transport Authority to dispose of the
application at a public hearing where the applicant, as well as, the person
who made the representation is entitled for an opportunity of personal
hearing either in person or by a duly authorized representative. We are
not concerned with sub-section (6), which pertains to contract carriage
permits.

(v) Under sub-section (7), in the event of the Regional Transport Authority
rejecting an application for variation, he should give reasons in writing
for such rejection.

Therefore, a conspectus consideration of sub-sections (1) to (5) and (7)
along with sub-section (8) shows that an application for variation when
treated as an application for the grant of a new permit, all the mandatory
requirements which are to be followed for the grant of a new permit have to
be followed in letter and spirit even with reference to an application for
variation viz., in the case on hand for either increasing the trips as well
as for increasing the number of vehicles. It is not as if such procedures
prescribed in sub-sections (1) to (7) barring sub-section (6) such
procedures are to be followed casually and that the same would ultimately
result in grant of variation irrespective of compliance or non-compliance
of such rigorous procedures. If the prescription of the time limit,
specified in sub-section (2) is not complied with, it may result in
instantaneous invalidation of the application at the very threshold.
Similarly, if the Regional Transport Authority failed to follow the
statutory prescription in the matter of publication of such an application,
by following the time limit and the other prescribed procedure under the
Rules, then again, the consideration of the application itself may not take
place until such prescriptions are meticulously followed and complied with.
Then again, under sub-section (4) anyone who wants to make a
representation as against the grant of variation will have to strictly
follow the time limit viz., filing of such representation before the
appointed date as notified by the Regional Transport Authority and that
while filing such representation, it must be ensured that simultaneously a
copy was served on the applicant, failure to follow such prescription will
automatically result in rejection of the right of hearing or right of
consideration of any such representation with reference to the application
for variation.

The requirement of giving a public hearing coupled with requirement of
personal hearing to the applicant as well as the person making the
representation is yet another prescription which again shows that very
serious consideration should be given to the application for variation in
as much as it will have very serious impact on the operation of the vehicle
in the route in question in the event of such variation being granted,
anyone living in that area can voice his grievance or support before the
Regional Transport Authority in such a public hearing. In other words the
very purpose of the requirement of providing a public hearing in sub-
section (5) shows that an application for variation is not merely concerned
with the applicant alone or anyone who wants to raise his objections by way
of representation to any such application for variation. But, it will open
up the scope for every member of a public in the locality concerned to
raise his voice in the public hearing which may have serious repercussions
in the event of the variation being granted or not granted, which the
Regional Transport Authority would be otherwise bound to consider before he
pass an order in the application for variation by giving adequate reasons
for grant or otherwise of such application for variation. Similarly, the
representatives may be another exempted operator or the State owned
Corporation, who can raise their objection and point out how the grant of
variation will not serve the public at large or create inefficiency or
uneconomical and result in lack of coordination.

Having thus analysed the entire Section 57 of the Act barring sub-section
(6) and sub-sections (9) and (10), it must be stated that though in sub-
section (8), it is stated that an application for variation should be
treated as an application for the grant of a new permit, in effect, such
consideration of an application for variation would be nothing but an
application for the grant of a new permit as every required step for the
grant of a new permit will have to be applied and scrupulously followed in
order to consider an application for variation and for its ultimate
disposal.

Therefore, we are not in a position to approve of the conclusion in
‘JAYARAM’ to the effect that the application for variation in spite of such
specifications and requirements to be complied and carried out under
various sub-sections of Section 57 of the Act, it is merely a fictional
requirement and will not amount to requirement strictly to be followed and
applied in the case of grant of a new permit. We therefore overrule such a
conclusion reached in ‘JAYARAM’. We also state that the contra opinion
expressed in ‘RAGHURAM’ will hold good.

With that when we come to the other Sections with which we want to make an
analysis, in the foremost, reference to Section 68-B of the Act has to be
made which falls under Chapter IV-A and which states that all the
provisions contained in Chapter IV-A shall have supervening effects on any
inconsistent provisions contained in Chapter IV or any other law for the
time being in force or in any instrument having effect by virtue of any
such law. Under Chapter IV Sections 42 to 68 of the Act have been listed.
In so far as, Section 57(8) of the Act, as has been noted by us and the
manner in which we interpret it, we can safely hold that there will be no
inconsistency with any of the provisions contained in Chapter IV-A. We can
therefore safely proceed that the said Section 57 will apply in all force
even in respect of the prescription contained in the provisions under
Chapter IV-A viz., Section 68A to 68I of the Act.

Keeping the said broad statutory prescription vis-à-vis Section 57 of the
Act, when we proceed to analyse Section 68C of the Act, we find that the
formulation of a scheme is to be prepared and published by a State
Transport Undertaking in respect of the services to be provided in any area
or route to be covered. The underlying object for such formulation of a
scheme for its preparation and publication, must be for providing an
EFFICIENT, ADEQUATE, ECONOMICAL and PROPERLY coordinated road transport
service with the paramount consideration of public interest and such scheme
should be prepared and published. Section 68C of the Act, therefore, at
the very inception of the formulation of a scheme by a State Transport
Undertaking, should have the basic consideration of efficient, adequate,
economical and properly coordinated transport service in public interest.
Once such a scheme is formulated with the above avowed objects in mind and
is notified, under Section 68D, on the publication of such a scheme in the
official gazette as well as in the newspaper in the regional language
circulating in the area or route, which is proposed to be covered by such
scheme, every person who is already providing transport facility in that
area or route or any association representing persons interested in the
provision of road transport facilities recognized by the State as well as
the local authority or police authority who are also located in that area
or route, will be entitled to raise their objections or their
representations within 30 days from the date of publication to the State
Government.

Under sub-section (2) of Section 68D of the Act, the State Government after
considering the objections and after giving an opportunity of hearing to
the objector or his representative as well as the representatives of the
State Transport Undertakings can either approve the scheme as proposed or
give a modified scheme. Under Section 68E of the Act, the scheme can be
cancelled in the form in which it was approved or can be modified by
following the very same procedure prescribed under sub-sections 68C and 68D
of the Act. However, the State Transport Undertaking with the previous
approval of the State Government can modify the scheme without following
the procedure laid down in Section 68C and 68D of the Act under the proviso
to Section 68E. That apart under sub-section (2) of Section 68E of the Act,
the State Government is fully empowered to modify any scheme published
under sub-section (3) of Section 68D of the Act after giving an opportunity
of hearing to the State Transport Undertaking, as well as, to any other
person who in the opinion of the State Government is likely to be affected
by the proposed modification. Once the approved scheme comes into effect,
under Section 68F of the Act, the State Transport Undertakings can be
issued with the required permits.

Section 68FF of the Act is an important section which requires to be noted
with some deeper scrutiny. Section 68FF creates a restriction on grant of
permits in respect of notified area or notified route. A close reading of
the said provision discloses that where an approved scheme as stipulated
under Section 68D(3) of the Act in respect of an area or a route is
published, then, it prohibits grant of any permit except in accordance with
the provisions of this scheme. The substantive part of Section 68FF
therefore makes it clear that once the approved scheme comes into play,
then, there will not be any scope for grant of any permit in that area or
the route covered by the scheme, except what is specifically permitted or
provided under that scheme itself. By way of an analogy, it can be stated
that where, under the scheme while the State Transport Undertaking alone is
exclusively permitted to operate the service in any particular area or
route and even while providing for such exclusive operation by State
Transport Undertaking, if the operation by any existing permit holder is
saved either fully or partially that as rightly stated in ‘RAGHURAM’ and
‘EGAPPAN’, such operation by other private operators gets frozen and as was
held by us earlier, while interpreting Section 57 (8) of the Act that
application for variation will be nothing but an application for grant of a
new permit. Therefore, even in respect of protected operation under the
scheme of any existing operator, as on the date of the approved scheme, he
will have to restrict his operations to the extent to which he was
permitted as on that date and the manner in which such operation was
permitted and not beyond.

Once things get frozen, the frozen stage can be changed only by way of a
permitted process. Here, when by virtue of Section 68FF of the Act, the
permit stood frozen, as on the date the scheme was published, then, if the
said frozen stage is to be altered or modified, the provision by which such
modification or alteration can be effected can be only by applying Section
68E, which is the legally permissible manner in which such frozen stage can
be altered or modified. Any other manner in which the said frozen stage is
sought to be altered or modified, that is totally prohibited under the
statutory provisions. Therefore, if under the scheme, if the permit gets
frozen, within the prescriptions contained under the scheme and if a
variation is to be considered for that permit either by way of increase in
the number of trips or addition of vehicle without any modification or
alteration effected under Section 68E of the Act, it will be wholly
prohibited under the provisions falling under Chapter IV-A and
consequently, such variation applied for can never even be considered by
any of the authorities. That will be the consequential effect of the
application of Section 68FF of the Act and other relevant provisions
falling under Chapter IV-A. In our considered opinion, any other
interpretation would run contrary to the prescription contained in Chapter
IV-A of the Motor Vehicles Act.

While interpreting Section 68FF of the Act, therefore we are convinced that
that is the only manner in which an interpretation to the said Section 68FF
can be made and in no other manner. The only other alternate available is
what is provided under Section 68E of the Act which again is within the
jurisdiction of the State Transport Undertaking or the State Government
under sub section 1 or 2 as the case may be.

As we are not called upon to answer any other question, we confine
ourselves to the question viz., on the publication of an approved scheme
whether the number of the trips of the vehicles of the existing operators
can be increased by granting the variation of the permit even when the
existing operators are allowed to carry on their operation on the date of
the publication of the scheme as it was existing as on that date. To the
said question, one other aspect to be considered is along with the number
of trips can such existing operator aspire to seek for increasing the
number of vehicles as well should also be added. In fact, when the
question of conflict as between ‘JAYARAM’ and ‘EGAPPAN’ was noted while
making the present reference to the Constitution Bench in the order dated
22.07.2003, the conflict really pertain to the variation applied for both
by way of increase in trips as well as increase of vehicles.

Having analysed the above referred to decisions and the statutory
provisions, before rendering our final answer to the question referred to
this Constitution Bench, it will be worthwhile to make a reference and list
out the legal propositions which we are able to discern based on our
detailed consideration in this reference:

Chapter IV-A supersedes any inconsistent provisions in Chapter IV.

The policy of the Legislature is clear from Section 68C that the State
Transport Undertaking may initiate a scheme for the purpose of providing an
efficient, adequate, economical and properly coordinated road transport
service to be run and operated by the State Transport Undertaking in
relation to any area or route or portion thereof. It may do so if it is
necessary in the public interest.

Grant of variation under Section 57(8) will be as good as grant of a new
permit.

Section 57(8) is controlled by Section 68FF falling under Chapter IV-A, by
virtue of the superseding effect of Section 68B also falling under Chapter
IVA

Once a scheme formulated under Section 68D gets approved under 68D(3) of
Chapter IVA, then all the permits in the route / area covered by the scheme
will get frozen by virtue of operation of Section 68FF.

The effect of Section 68FF can be altered / modified / cancelled only in
the manner as provided for under Section 68E and in no other manner.

By virtue of the above, either a grant of a new permit or the variation of
an existing permit of private operator cannot be ordered in respect of an
area or route covered by an Approved Scheme.

Increase in the number of trips or vehicles which were being run under the
existing exempted permit under a Scheme will amount to grant of a new
permit to operate one more Stage Carriage which is not permissible under
Section 68FF.

The proposition of law, laid down by this Court in ‘JAYARAM’ impliedly
stood overruled in ‘ADARSH TRAVELS’.

The economy and coordination, two of the factors, which govern the Approved
Scheme, will be seriously infringed if the variation is to be granted of
the existing permit condition.

Even if there is an interstate agreement under Section 63 of the Act for
increasing the number of trips, such an agreement cannot override the
provisions of Chapter IV-A by virtue of Section 68B of the Act. Section 63
being in Chapter IV of the Act, the Scheme approved under Chapter IV-A will
prevail over it.

The Approved Scheme will exclude the operation of other stage carriage
services on the Route / Area covered by the Scheme, except those whose
names are mentioned in the Scheme and to the extent to which such exception
is allowed.

The provisions in Chapter IV-A are devised to override the provisions of
Chapter IV and it is expressly so enacted, the provisions of Chapter IV-A
are clear and complete regarding the manner and effect of the “takeover” of
the operation of a road transport service by the State Transport
Undertaking in relation to any Area or Route or portion thereof (ADARSH
TRAVELS).

A necessary consequence of those provisions is that no private operator can
operate his vehicle on any part or portion of a notified area or notified
route unless authorized so to do by the term of the scheme itself. He may
not operate on any part or portion of the notified Route or Area on the
mere ground that the permit as originally granted to him covered the
notified Route or Area (ADARSH TRAVELS).

Having regard to the above propositions, which we are able to arrive at, we
hold that the judgment reported in Karnataka State Road Transport
Corporation, Bangalore Vs. B.A. Jayaram and others – 1984 (Supp) SCC 244 is
no longer a good law and the decision reported in Pandiyan Roadways
Corporation Ltd. Vs. M.A. Egappan – (1987) 2 SCC 47 stands approved which
is in tune with the Constitution Bench decision reported in Adarsh Travels
Bus Service and another Vs. State of U.P. and others – (1985) 4 SCC 557 and
the observations made in R.Raghuram Vs. P. Jayarama Naidu and others – 1990
(supp) SCC 361 stands approved.

The reference is answered as above. Having thus answered the reference, we
direct the Registry to list the cases before the regular Bench for disposal
by applying the principles set down in this judgment wherever it is
applicable.

.………………………………………..C.J.I.
[T.S. Thakur]

..….…………………………………………J.
[Fakkir Mohamed Ibrahim Kalifulla]

..….…………………………………………J.
[S.A. Bobde]

..….…………………………………………J.
[R. Banumathi]

..….…………………………………………J.
[Uday Umesh Lalit]

New Delhi;
July 19, 2016

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.