Holding

Exception 2 applies only to existing town‑service operators on the notified routes, thereby excluding fresh applicants, and the scheme excludes private operators on overlapping town‑service routes.

Summary

The Andhra Pradesh State Road Transport Corporation (the Corporation) framed a scheme under s.99 of the Motor Vehicles Act, 1988 to nationalise the mofussil service in West Godavari district, excluding all private operators on the notified routes and on any routes overlapping them. The scheme contained Exception 2, which stated that "the existing town services operating on the notified routes" would not be affected. Respondent No. 3, who was not an existing town‑service operator, applied for a permanent stage‑carriage permit on a town‑service route that overlapped the notified mofussil route. The Regional Transport Authority rejected the application; the State Transport Appellate Tribunal allowed it; the High Court Full Bench held that town‑service routes were not covered by the scheme and allowed the permit. The Corporation appealed to the Supreme Court. The Court held that the scheme’s clauses 3, 4 and 5 expressly covered the entire mofussil service and excluded all private operators, including those on town‑service routes, and that Exception 2 was worded restrictively to apply only to operators already providing town service on the notified routes. Consequently, fresh or future applicants like Respondent No. 3 are ineligible for permits. The Supreme Court set aside the High Court judgment and allowed the appeals.

Issues considered

Whether a scheme under s.99 that nationalises the mofussil service and excludes private operators also excludes private operators on town‑service routes that overlap the notified mofussil routes.
Whether Exception 2 in the note to the scheme, which refers to "the existing town services operating on the notified routes", limits permits to existing operators and bars fresh or future applicants.

Legislation cited

Motor Vehicles Act, 1939s. 63(3-B)
Motor Vehicles Act, 1988s. 100, s. 102, s. 103, s. 104, s. 88(8), s. 99
Motor Vehicles Rules, 1989s. Rule 258

Subjects

Motor Vehicles Actschemenationalisationmofussil servicetown servicestage carriage permitexception clauseexisting operatorsexclusion of private operatorsconstitutional bench

Judgment

A.P.S.R.T.C. A
V.

REGIONAL TRANSPORT AUTHORITY AND ORS.

APRIL 28, 2005

,,,_ [N. SANTOSH HEGDE, K.G. BALAKRISHNAN, D.M. B
DHARMADHIKARI, ARUN KUMAR AND B.N. SRIKRISHNA, JJ.]

Motor. Vehicles Act, 1988:

s.99-Nationalization of mofussil service-Exclusion of private C
operators-Exception providing that existing town services operating on notified
routes not to be affected-Effect of-Held, under the Scheme entire mofussil
service is covered-There is complete exclusion ofall private operators holding
stage carriage permits on proposed routes as well as those holding such
permits on routes overlapping completely or partially with the proposed route- D
Under the Exception only existing operators, and not fresh applicants or
future applicants, are eligible for permits.

Appellant-Corporation framed a Schemes under s.99 of the Motor
Vehicles Act, 1988 whereunder mofussil service in a particular region of
the State was nationalized. However, under Clause 2 of the Note appended E
to the Scheme, it was provided that the Scheme would not affect "the
existing town service operating on the notified routes". Respondent No.
3, not being an existing town service operator, applied for permanent stage
carriage permit on a particular town service route. The Corporation
objected contending that permit was sought on a portion of notified route F
under the Scheme. The Regional Transport Authority rejected the
application. But, the State Transport Appellate Tribunal held in favour
of respondent No. 3. The Corporation challenged the order in a writ
petition before the High Court and ultimately a Full Bench of the High
Court held that town service route was not automatically covered under
the Scheme which was specifically for mofussil service, and permits could G
be granted for town service routes.

The Corporation filed appeals before the Supreme Court. The Bench
before which the appeals were listed for hearing, noticed the earlier
decision of the Supreme Court in Andhra Pradesh State Road Transport
~1 H
932 SUPREME COURT REPORTS (2005] 3 S.C.R.

A Corporation v. State Transport Appellate Tribunal and Ors.* and felt that
the issue be settled by a larger Bench. Therefore, reference was made to
the Constitution Bench.

On the questions : Whether, in view of the Scheme which covers
mofussil service and provides for total exclusion of private operators
B including operators on town service routes, and even routes overlapping
with the notified mofussil service having been covered, it is permissible
for ·Regional Transport Authority to grant permits to private operators
on the notified town service routes or portions thereof; and

whether Exception 2 in the note appended to the Scheme providing
C that the Scheme shall not affect "the existing town services operating on
the notified routes" relates only to existing town services operating on the
notified routes so as to exclude fresh or future applicants for grant of
permits:

D Answering the reference, the Court

HELD: 1.1. Rule 258 of the A.P. Motor Vehicles Rules, 1989 makes
it clear that no route shall be determined as both town and mofussil service
route. The words "mofussil service" suggest that the service covers a long
distance having several stages on the route. Town service, on the other
E hand, as the words suggest, is normally a shorter route since it operates
within the town itsel.f. In the instant case, it is not in dispute thl!t there is
a valid Scheme with respect to the mofussil service for the particular region
of the State. [937-C; 943-C-F)

1.2. The object of the Scheme is to nationalize the entire service.
F Under Clause 3 of the Scheme, the entire mofussil service is covered.
"Service" is a term of wider connofation. In view of Clauses 4 and 5 of
the Scheme, there is complete exclusion .of all other persons holding stage
carriage permits on the proposed route as well as those holding stage
carriage permits on the routes overlapping completely or partially with
the proposed route. A combined reading of these clauses shows that the
G Scheme excludes all private operators Thus, all private operators including
those operating on town service routes are excluded, subject, however, to
the exception. The conclusion of the Full Bench of the High Court that
the town· services operating on the route, even though overlapping with
mofussil services are entitled to permit under the Scheme, cannot be
H accepted. [940-D-H; 941-A; 944-Bl
A.P.S.R.T.C: v. REGIONAL TRANSPORT AUTHORITY 933

Achyut Shivram Gokhale v. Regional Transport Offiver and Ors.; f 19881 A
Suppl. SCC 696, distinguished.

2.1. Under Exception 2 contained in the Note appended to the
Scheme, permits can be issued only to existing town services operating on
_,. the notified routes. This means only existing operators on the notified
routes are eligible for permits. Fresh applicants or future applicants are B
totally ineligible for getting permits for town services operating on notified
routes. (945-A-B]

2.2. Exception 2 has been worded restrictively. It refers to existing
town services operating on notified routes. The words 'existing' and
'operating' have to be given their due meaning. These words make it clear C
that the exception applies to only those who were already operating the
service and not to future applicants like respondent No. 3. Even otherwise,
it will be seen that if the existing town services operating on the notified
routes were not to be affected by the Scheme, there was no need for the
exception. Therefore, it cannot be said that since town service has not been D
mentioned in clause 3 of the Scheme, the town service has been left free.
(941-A-D; 944-BI

.. 2.3. Andhra Pradesh S.R.T.C. v. State Transport Appellate Tribunal and
Ors.* is no authority for the proposition that future applicants are not to
be barred. Secondly, everything depends on the language of the Scheme E
in a given case. The language of the Scheme including exception No. 2 to
the Scheme in the present case is very clear and does not admit any doubt.
(942-C-D)

*Andhra Pradesh S.R.T.C. v. State Transport Appellate Tribunal and
Ors.,* [1998) 7 sec 353, distinguished. F
C. Kasturi and Ors. v. Secretary, Regional Transport Authority and Anr.,
[1996) 8 sec 314, referred to.

2.4. It cannot be said that if future applicants are excluded, town
services will suffer resulting in inconvenience to the public. The State . G
Government has the power to modify a Scheme in case of need. The Act
permits modification of a Scheme. (942-E-F)

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3700-3712
of 2001.
H
.· i:--

934 SUPREME COURT REPORTS [2005] 3 S.C.R.

A From the Judgment and Order dated 15.3.2001 of the Andhra Pradesh
High Court in W.P. Nos. 1772,9/90, 1548, 2157/95, 4428, 6500, 6501, 6502/
96, 600 I, 6009, 6011, 6021/97, 15538 and 17953 of 1998.
WITH
C.A. No. 1674/96, SLP(C) Nos. 10266, 10267/97, C.A. Nos. 346-351/
B 2002, 368-371, 374-376, 352-353, 356-357, 360-361, 364, 111-.11812002,
SLP (C) No. 14923/2003, C.A. Nos. 963-969, 971- 973, 975-980, 377-379/
L
2002, 4449 and 85 of 2004. r-
1

L. Nageswar Rao, Mrs. K. Amareswari, M.N. Rao, R. Santhanakrishnan,
Jayant Muthraj, Roy Abraham, S.atish, Ms. Radha Rani, G. Prabhakar, G.
C Ramakrishna Prasad, Guntur Prabhakar, S. Srinivasan, S.Uday Kumar Sagar,
D. Mahesh Babu, CS.N. Mohan Rao, B. Ramanamurthy, Anil Kumar, Mrs.
Anjani Aiyagari, T.N. Rao, Maruthi Raja, A.V. Rangam, A.Ranganadhan,
Buddy A. Ranganadhan, B. Vikas, Mrs. b. Bharathi Reddy, V.G. Pragasam, ,___
Anil Kumar Tandale, G.R. Prasad, Mrs. P.V. Padma Priya and Mrs. K. Sharda
D Devi with them for the appearing parties.

The Judgment of the Court was delivered by

ARUN KUMAR, J. These appeals along with connected appeals have
been placed before the Constitution Bench in view of an order of reference
E made by a Bench of three Hon 'ble Judges of this Court. For appreciating the
point regarding which reference has been made, it is necessary to state a few
facts. The appellant is a State Road Transport Corporation of the State of
Andhra Pradesh (hereinafter referred to as the 'Corporation'). In public interest,
the .Corporation framed Schemes for providing transport services in different
regions of the State. We are presently concerned with the West Godavari
F District of the State. The Schemes framed by the Corporation were
subsequently approved by the State Government and notified in the official
Gazette. The scheme which is subject-matter of the present appeals cover the
route D.N.R. College (Bhimavaram) to Srinvavruksham. The route falls within
the mofussil service which was nationalized under the Scheme. The effect of
G nationalization of the service is that all private operators on the entire length
of the service and overlapping routes are completely excluded. No private
operator can get permit to ply transport vehicles for hire on routes falling
within the service. However, the Scheme contains five exceptions for which
permits can be issued to private operators. One of the exceptions is in favour
of "the existing town services operating o~ the notified routes". The main
H issue involved in these appeals is as to whether under the said exception
A.P.S.R.T.C. v. REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.] 935

permits can be issued in favour of fresh applicants for permits for town A
services ~out:s falling on or overlapping with the nationalised mofussil service.

Respondent No. 3 who is not an existing town service operator, submitted
an application to the Regional Transport Authority, West Godavari for
permanent stage carriage permit on the town service route. The appellant -
Corporation objected to the grant of permit on the ground that permit was B
sought on a portion of notified route under the Scheme. The Regional Transport
Authority accepted the objection and rejected the application of respondent
No. 3 for grant of permit. Aggrieved by the said order respondent No. 3 filed
an appeal before the State Transport Appellate Tribunal. The tribunal allowed

- the appeal and directed that a permit be granted to respondent No. 3 on the
town service route for which he had applied. The appellant - Corporation
challenged the said order by filing a Writ Petition in the Andhra Pradesh
C

High Court. The High Court constituted a Full Bench to consider the issue
in view of divergence of opinion between different Benches of the court on
the issue. The Full Bench of the High Court took the view that town service
routes were not automatically covered under. the Scheme which was specifically D
for mofussil service. Therefore, it was held that the Regional Transport
Authority could grant permit on the town service route. The Writ Petiton
filed by the appellant - Corporation was dismissed. The present appeals are
directed against the said judgment of the Full Bench.
The appeals raise two main issues : E
(l) The Scheme covers mofussil service and provides for total
exclusion of private operators including operators on town service
routes. Even routes overlapping with the notified mofussil service
stood covered. In view of this is it permissible for the Regional
Transport Authority to grant permits to private operators on the F
notified town service routes or portions thereof ?

(2) Exception 2 in the Note appended to the Scheme is : " the existing
town services operating on the notified routes". Does the exception
relate only to existing town services operating on the notified
routes meaning thc:reby that fresh er future applicants for grant of G
pei;mit are excluded ?

....\ When the appeals came up for hearing before a three Judge Bench of
this court, prima facie it was. felt that there was merit in the contention that
only existing operators on town services notified routes could be issued permits
( under the exception. But a judgment of this court in Andhra Pradesh State H
/ 1
936 SUPREME COURT REPORTS (2005) 3 S.C.R.

A Road Transport Corporation v. State Transport Appellate Tribunal and Ors.,
[ 1998] 7 SCC 353 was brought to the notice of the Bench to support a
contrary view that under exception No. 2, it is permissible to grant permits
on town service routes to fresh or fu~ure operators. This led to a reference
being made to a larger Bench. Hence the matter has been placed before this
B Bench.

At the outset, the learned counsel for the appellant - Corporation
submitted that the judgment in Andhra Pradesh State Transport Corporation
v. State Transport Appellate Tribunal and Ors., [1998] 7 SCC 353 cannot be
said to be an authority for the proposition that under exception No. 2 to the
C Scheme future applicants for permits can be granted permits for the town
services on notified routes. He has taken us through the said judgment and
with due respect to the.referring Bench we find merit in the submission of
-
the learned counsel for the appellant. The judgment in APSRTC Case is on
a totally different aspect, that is, interpretation of Rule 258 of the Andhra
Pradesh Motor Vehicles Rules. It ~as no bearing on the controversy involved
D in the present case. The contention raised on behalf of the State Transport
Corporation in that case was that permission of the Transport Commissioner
was a condition precedent for filing an application for route permit when
there was a Scheme governing the route. This argument was raised on the
basis of Rule 258 (2) of the Andhra Pradesh Motor Vehicles Rules, 1989.
The court held that permission of the Transport Commissioner was necessary
E in view of Rule 258(2) before applying for a route covered under the Scheme.
The second question involved in the case was regarding the extent of powers
of the Transport Commissioner under Rule 258 (2). This Court answered the
second question holding that the powers were not unlimited and had to be
exercised as per the Scheme. Now that we have heard the learned counsel for
F the parties at length, we propose to dispose of the appeals on merits.

Section 99 vf the Motor Vehicles Act, 1988 (hereinafter referred to as
the 'the Act') envisages preparation of schemes by the State Government for
rendering transport services in a State. First proposals are to be fonnulated
regarding a scheme, i.e., regarding services proposed to be rendered in the
G area or the route proposed to be covered. Such a proposal is to be published
in the official gazette as well as in a regional language newspaper circulated
in the area. Under Section I 00 any person is authorised to file objections
against the proposal within 30 days of its publication. The State Government
may give opportunity to the objector or his representative to appear in person
H for being heard regarding objections and after considering the objections the
A.P.S.R.T.C. v. REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.) 937

proposal may be finalised. Thereafter, it is to be published in the official A
gazette by the State Government and thereupon it becomes final as a Scheme.
Section 102 contains provision regarding modification of an approved Scheme '
in public interest. Section I 03 deals with issue of permits as per the Scheme.
Section 104 deals with restrictions on grant of permit in respect of notified
area or notified route. It specifically prohibits the Regional Transport Authority }3
from granting any permit except in accordance with the provisions of the
Scheme. It also envisages issuance of temporary permits during a period
when a regular permit is not issued. Section 88(8) authorises the Regional
Transport authority to grant special permits for convenience of public. Such
special permits are meant to cater to special requirements like transportation
of marriage parties, stage carriages used for purposes of taking persons for <;:
pilgrimage etc. In the present case, it is not in dispute that there is a valid
Scheme with respect to the mofussil service for the particular region of the
State. It is also not disputed that a permit can be issued only as per the
approved Scheme and not otherwise. The relevant provisions of the Scheme
are reproduced as under :

SCHEME

} .................. .
2 ................... . E
3. Whether town service or mofussil Mofussil service/Stage carriage.
service or both.

4. Maximum and minimum number No of buses details of which are
of vehicles proposed to be operated furnished in the annexure will be B
on each route by the State Transport operated to the complete exclusion
Undertaking to the exclusion, of all other persons holding stage
complete or partial or otherwise of carriage permits ·on the proposed
other persons. route and such other persons holding
stage carriage permits on the routes a'
overlapping completely or partially
on the proposed route except to the
extent specified in the note
hereunder.

(a) ........... . H,
938 SUPREME COURT REPORTS [2005] 3 S.C.R.

A
(b) ........... .

(c) ............ .

(d) ............ .
B
5. Maximum and minimum number
of trips proposed to be performed
No of round trips details of which
are furnished in the annexure will ---
on each route by the State Transport be operated to the complete
Undertaking to the exclusion, exclusion of all other persons
complete or partial or otherwise of holding stage carriage permits on the
c other persons. routes overlapping completely or
partlally on the· proposes route
except to the extent specified in the
note hereunder.

D (a) ............... .
\....
•.i..,

(b)............... .

6................. .

E 7 ................ .

8.................... .

9 .................... .
F 10 ................... .

NOTE : This Scheme shall not affect :

I. The State Transport Undertaking.
G 2. The existing town services operating on the notified routes.
3. The holders of stage .carriage permits for a distance not exceeding
5 Kms on the notified route.
4. The existing services operating on the ln!er-state routes
incorporated in the concluded inter-state agreement u/s 63 (3-B)
H

..I
A.P.S.R.T.C. v. REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.] 939

of M.V. Act, 1939, and A
5. The services opeated by Devasthanams."

The learned counsel for the appellant submitted that the Scheme covers
the entire mofussil service which means that all the routes falling within the
particular mofussil service are covered under the Scheme. This will cover the
overlapping routes and the town service routes. Unless it is so, the object of
B
the Scheme, which is to provide cheap ansJ efficient service to the commuters,
will stand defeated. 'Service' is a word having wider connotation as compared
to the word 'route'. Route may mean a particular route while service would
include all the routes in a particular mofussil. When the entire service in th~
mofussil area is nationalized, all the routes falling within the mofussil C
automatically get nationalized, which will cover the town service routes also.
As a result of nationalisation of the service no permits can be issued for
operating transport vehicles in favour of private operators. He has drawn our
attention to the defb.ition of the word 'permit' contained in sub-section (31)
of Section 2 of the Act according to which permit means a permit issued by
a State or Regional Transport Authority or authority prescribed in this behalf D
under this Act authorising the use of motor vehicle as a transport vehicle. In
view of this definition of the word 'permit', it is submitted, it means that no
one can ply a motor vehicle as a transport vehicle without a valid permit. The
net effect of nationalisation of the service is that the private operators become
disentitled to obtain permits for plying vehicles for hire. EI
At this s•age, we may also quote the definition of the word 'route' and
'stage carriage' as containecl in sub-sections (38) and (40) of Section 2 of the
Act.

"Section 2: F
***************
Sub-section (38) : "route" means a line of tr~vel which specifies the
highway which may be traversed .by a motor vehicle between one
terminus and another.
G
(39) ..................... .
..... (40) "stage cai:riage" means a motor vehicle constructed or adapted
to carry more than six passengers excluding the driver for hire or
reward at separate fares paid by dr for individual passengers, either
for the whole journey or for stages of the journey." H
940 SUPREME COURT REPORTS [2005) 3 S.C.R.

A Respondent No. 3 applied for pennit with respect to a town service
route from D.N.R. College (Bhimavaram) to Srinvavruksham. The application
of respondent No. 3 was rejected by the Regional Transport Authority.
According to respondent No. 3 he fell within exception No. 2 to the note
appended to the Scheme and, therefore, he was entitled to get a permit for
B the town service route. The learned counsel appearing for respondent No. 3
submits that the Scheme applies only to mofussil service and town service
routes are not affected by the Scheme. Respondent No. 3 staked his claim to '
.,_...-~--

the permit on two grounds :

(I) that the town service routes are not covered under the Scheme
and
c
(2) the exception regarding town service route will include not only
the existing operators but also those who apply for fresh permits.

Regarding the first point urged on behalf of respondent No. 3, one
needs to consider the Scheme, particularly clauses 3, 4 and 5 of the Scheme, l
,~
D which have been quoted hereinbefore. Under clause 3, the entire mofussil
service is covered. "Service", as already stated, is a term of wider connotation.
Then, with reference to clauses 4 and 5 of the Scheme, it would be seen that
there is complete exclusion of all other persons holding stage carriage permits
on the proposed route as well as those holding stage carriage permits on the
E routes overlapping completely or partially with the proposed route. Likewise,
clause 5, dealing with number of trips to be performed on each route by State
Transport !Jndertaking to the exclusion of other persons, provides for complete
exclusion of other~ holding stage carriage permits on the overlapping routes
as well. The only exception has been made with respect to the five categories
mentioned in the note to the Scheme.
F . ..
The object of the Scheme appears to be to nationalise the entire service.
Through nationalisation of the service effort is to provide better service to the r
).

commuters at cheaper cost. One of the exceptions to the Scheme is for existing '
town services operating on the notified routes. The reason for which appears
to be that the existing town services need not be disturbed so that the
G commuters do not suffer.

The question for consideration is, whether mofussil service will cover
town services operating on notified routes? A combined reading of clauses
3, 4, and 5 of the Scheme reproduced hereinbefore shows that the Scheme
H excludes all private operators. These clauses provide for complete exclusion
A.P.S.R.T.C. 1» REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.] 941

of all other persons holding stage carriage permits. There is no scope for any A
doubt. All private operators including those operating on town service routes
are excluded, subject, however, to the exceptions. Looking at the issue from
a different angle, it will be seen that if the existing town services operating
on the notified routes were not to be affected by the Scheme, there was no
need for the exception. This also answers the argument that since town service B
has not been mentioned in clause 3 of the Scheme, the town service has been
left free. Clauses 3, 4 and 5 have to be read together to find out the real
purport of the Scheme.

Next it was contended on behalf of respondent No. 3 that the second
exception covers all town services and should not be confined to existing C
services. This means fresh applicants for town service routes should be given
permits. In our view this submission is not tenable in view of clear wordings
of the exception. The exception refers to existing town services operating on
notified routes. The words 'existing' and 'operating' have to be given their
due meaning. These words make it clear that the exception applies to only
those who were already operating the service and not to future applicants like D
respondent No. 3. To illustrate, reference may be made to exception No. 2
contained in the Scheme which was subject matter of APSRTC v. State
Transport Appellate Tribunal and Ors., (1998] 7 SCC 353 . There the
exception is for "the holders of stage carriage permits in respect of town
services." Expression "holders of stage carriage permits" has a wider E
connotation. Even future applicants can be said to be holders of permits and
thus eligible for grant of permits. In contrast the exception to the Scheme in
the present case refers to existing town services operators only. In C. Kasturi
and Ors. v. Secretary, Regional Transport Authority and Anr., (1996) 8 SCC
314 the exception runs as under :
F
"I.
2. The holders of the existing stage carriage permits in respect of
town service routes.

3. The holders of the future stage carriage permits in respect of
town service routes having an over-lapping of not more than 8 G
Kms on the notified routes.

..... 4.

5.

H
A
942 SUPREME COURT REPORTS [2005) 3 S.C.R.

Thus the exception clearly spells out that existing as well as future
operators will be eligible for pennits. By referring to the language used in
--.
different schemes what we want to show is that the framers of the schemes
are fully aware of what they want and they specify clearly whatever is intended
in a particular Scheme. Wherever they want to include future applicants, they
say so. The exceptions are worded accordingly. In the present case, the
B exception applies only in case of existing operators on town services. Thus,
we find no merit in the contention of respondent No. 3 that he is entitled to __,
a permit by virtue of the exception No. 2 contained in the relevant Scheme.
This also answers the argument that the Scheme is lacking in clarity.
r
C Mr. M.N. Rao, leanied senior counsel appearing for the future applicants r-
for town service routes submitted that if future applicants are to be excluded, ·-.-
1998 (7) SCC 353 [Andhra Pradesh S.R.T.C. v. State Transport Appellate
Tribunal and Ors.,] has to be overruled. In our view, this argument is totally
misconceived. Firstly, we have already referred to the said judgment which
in our view is no authority for the proposition that future applicants are not
D to be barred. Secondly, we feel that everything depends on the language of
the Scheme in a given case. We have already referred to provisions in different
Schemes in order to illustrate the point. The language of the Scheme including
exception No. 2 to the Scheme in the present case is very clear and .does not

E
admit any doubt

Lastly, it was submitted by Mr. M.N.Rao, learned senior counsel that
if future applicants are excluded, town services will suffer resulting in
·-
inconvenience to the public. This argument is wholly untenable. It is for the
State Government to consider what is suitable for public service. The State
Government has the power to modify a Scheme in case of need. After all the
F Schem'-.:. are intended for the benefit of the public and if any step is required
to be taken for the purpose, the State Government can always do so by
modifying the Scheme. The Act permits modification of. a Scheme.

The Full Bench of the High Court noted in its impugned judgment that
the Regional Transport Authority's reason for rejection of applications for
G permits by private operator5 was that the route applied for by them overlaps
the notified mofussil route w11ich was meant for the State Transport Corporation
as per the Scheme approved by the Government. The Full Bench also noted
that a Division Bench of the same Court in W.A.No. 56 of 1992 had vide
judgment dated 14th October, 1992 taken the view that mofussil service
H includes town service and that merely because town service route is not
A.P.S.R.T.C. 1• REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.) 943

mentioned in the notified public scheme, that is not a ground to grant a A
pennit for town service route. Another Division Bench of the same High
Court had in Rajappa Kawati v. G. Hanumantha Rao and Anr. taken a contrary
view according to which permits could be issued for town service routes even
when the scheme nationalised the entire mofussil service and town service
route overlapped with the mofussil service. It was on account of this divergence
of opinion of the Division Benches of the High Court that the reference had Bi
been made to the Full Bench. The question for consideration before the Full
Bench was, when prohibition had been imposed in the Scheme approved by
the Government as per which private operators of stage carriages were
completely excluded from the mofussil service, what would be the fate of
applicants for permits for running on the town service? Rule 258 of the A.P. C
Motor Vehicles Rules, 1989 makes it clear that no route shall be determined
as both town and mofussil service route. The words "mofussil service" suggest
that the service covers a long distance having several stages (points) on the
route. Long routes are divided into various stages for purposes of fixing fares
from one stage to the next stage and the carriages which run on the routes
for hire are called stage carriages. A route or a service may have several D1
stages. Each stage will be the distance on the route from the preceding stage
to the next stage. The stages are fixed in order to fix the fare for convenience
of the passengers from the preceding point to the next point Passengers have
to pay fare only for the particular distance travelled by them and not for the
entire route. Town service, on the other hand, as the words suggest, is normally E
a shorter route since it operates within the town itself.

One of the reasons which weighed with the Full Bench in the impugned
judgment is that if the Scheme was to cover both mofussil service and town
service it could have been stated so in the Scheme itself in unmistakable
terms. With due respect this reasoning does not appeal to us. There is no F
scope for thinking that the Scheme does not say what it is intended to say.
We must not overlook the language used against clauses 4 and 5 of the
Scheme which provide for complete exclusion of all other persons holding
stage carriage permits on the proposed route and on the overlapping routes
except for the exceptions contained to the Scheme itself. There is yet another G
reason which militates against the view of the Full Bench on the point. A

-- reference to the language of the exception would show that Q.nly existing
town services operating on the notified routes have been permitted. In some
of the other Schemes to which rc.ference has been made in this judgment for
purpose of illustration it will be seen that wherever the scope of the exception
was to be widened so as to cover more categories of operators, "it has been H
944 SUPREME COURT REPORTS [2005] 3 S.C.R.

A specifically provided for. In one of the Schemes the holders of future stage
carriage permits in respect of town service routes have been allowed under
the exception while in another case instead of existing town services, the
words used are 'holders of permits'. Holders of permits can include those
who happen to hold permits in future. It is in the scheme in the present case
B that exception No. 2 has been werded restrictively so as to cover only existing
town services operating on the notified routes. Thus we are unable to accept
the conclusion of the Full Bench contained in the impugned judgment that
the town services operating on the route, even though overlapping with
mofussils services, are entitled to permit under the Scheme which is subject
---
matter of the present appeal.
c Reliance placed by the Full Bench in the impugned judgment on Achyut
Shivram Gokha/e v. Regional Transport Officer and Ors., [1988] Suppl. SCC
696 in supp~rt of the observation that a scheme cannot be given a wider
application than intended to by its maker does not appear to be correct so far
as facts of this case are concerned. In the cited case this Court was considering
D the grant of special permits on routes covered under notified schemes. It was
noted by this Court that special permit is meant for special occasions like
marriage parties or pilgrimage and the State authorities had the power to
issue such permits even when the routes were otherwise notified under
Schef!IeS. This judgment cannot be said to an authority for the proposition
E suggested in the impugned judgment that "a scheme, although has to be read
in the context of Section 104 of the Act, but the same cannot be given a
wider application than intended by the maker thereof." The permits sought
for by the private operators in the present case cannot be equated with special
permits envisaged under Section 88 (8) of the present Act which is equivalent
of Section 63 (6) of the old Act. The object of granting special permits is
F totally different. Special permits are me .... it to cater to special needs on special
occasions like marriage parties, pilgrimage etc.

The impugned Full Bench decision further draws on the principle of
purposive interpretation for upholding the view that permits can be granted
for town service even if mofussil service is nationalized. For invoking the
G principle of purposive interpretation the Bench felt that there was some
ambiguity in the scheme or something was not clear. We have carefully gone
through the scheme which is subject matter of the present appeals and we do
not find any ambiguity or lack of clarity in the Scheme so as to invoke the
principle of purposive interpretation.
H
A.P.S.R.T.C. i·. REGIONAL TRANSPORT AUTHORITY [ARUN KUMAR, J.] 945

For all these reasons we are unable to agree with the view taken by the A
Full Bench in the impugned judgment. In our view, under exception 2
contained in the Note appended to the Scheme, subject matter of the present
appeals, permits can be issued only to existing town services operating on the
notified routes. This means only existing operators on the notified routes are
eligible for permits. Fresh applicants or future applicants are totally ineligible B
for getting pennits for town services operating on notified routes. These
appeals are accordingly allowed. The impugned judgment of the Full Bench
of the High Court is set aside. In the facts and circumstances of the case there
will be no order as to costs.

Hearing of this matter was confined to the legal issue referred to a C
Bench of five Judges as per the order of Reference dated 7th August, 2002.
Through the above judgment we have answered the Reference. Let the
remaining cases be placed before an appropriate Bench for final disposal.

R.P. Reference answered.

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