Supreme Court of India
G.T. VENKATASWAMY REDDYversusSTATE TRANSPORT AUTHORITY & ORS.
- Citation
- 2016 INSC 540
- Decided
- 19 July 2016
- Disposal
- Reference answered
- Bench
- T S THAKUR
Holding
An application for variation of a stage‑carriage permit to increase trips or vehicles under an approved scheme is deemed a grant of a new permit and, by virtue of Section 68FF (and the superseding effect of Chapter IV‑A), such variation is barred.
Summary
The case concerned whether, after an approved scheme under the Motor Vehicles Act is published, existing private operators may increase the number of trips or vehicles by obtaining a variation of their stage‑carriage permits. The Court examined Section 57(8), which treats such variations as applications for new permits, and the overriding provisions of Chapter IV‑A, particularly Sections 68B, 68FF and 68E, which freeze permits in the notified area once a scheme is approved. It held that any increase in trips or vehicles amounts to a new permit and is prohibited by Section 68FF unless the scheme is modified under Section 68E. Consequently, the earlier decision in *Jayaram* was overruled, and the Court affirmed the view in *Egappan* and *Adarsh Travels*. The reference was answered, directing the cases to be listed before a regular bench.
Issues considered
- Whether, on publication of an approved scheme, the number of trips or vehicles of existing operators can be increased by granting a variation of a permit
- Whether a variation of a stage‑carriage permit is permissible in a notified scheme route
Legislation cited
- Motor Vehicles Act, 1939s. 48, s. 57(8), s. 63, s. 68A, s. 68B, s. 68C, s. 68D, s. 68E, s. 68F, s. 68FF
Subjects
Motor Vehicles Actpermit variationapproved schemesection 57section 68FFstage carriagepublic interesttransport regulationsupersessioncourt overrulepublic hearing
Judgment
[2016] 8 S.C.R. 1
G.T. VENKATASWAMY REDDY A
v.
STATE TRANSPORT AUTHORITY & ORS.
(Civil Appeal No. 4480of1998)
JULY19,2016 B
[T.S. THAKUR, CJI, 'FAKKIR MOHAMED IBRAHIM
KALIFULLA, S.A. BOBDE, R. BANUMATHI AND
UDAY UMESH LALIT, JJ.]
Motor Vehicles Act, 1939: ss.48, 57(8), 63 - Whether on
the publication of an approved scheme the number of trips of the c
vehicles of the existing operators can be increased 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 - Held: A close reading of the sub-section (8) of s.57 shows
that an application for variation of any permit in the case of a D
stage carriage, for the purpose of increasing the number of trips as
well as number of vehicles covered by the permit, mandatorily to be
treated as an application for the grant of a new permit - s.57(8) is
controlled by s. 68FF falling under Chapter IV-A, by virtue of the
superseding effect of s.68B also falling under Chapter IVA - Once
a scheme formulated under s. 68D gets approved, then all the permits E
in the route/area covered by the scheme get frozen by virtue of
operation of s.68FF - The effect of s.68FF can be altered /modified/
cancelled only in the manner as provided for under s.68E and in
no other manner - By virtue of that, either a grant of a ne11• permit
or the variation of an existing permit of private operator cannot be
F
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 s.68FF.
G
s.57 - Application for variation of permit - Requirement for
its grant - Held: A conspectus consideration of sub-sections (1) to
(5) and (7) along with sub-section (8) of s.57 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
H
2 SUPREME COURT REPORTS [2016] 8 S.C.R.
A be followed for the grant of a new permit have to be followed in
letter and spirit even with reference to an application for increasing
the trips as well as for increasing the number of vehicles.
Answering the reference, the Court
HELD: 1.1 A close reading of the sub-section (8) of section
B 57 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,
mandatorily to be treated as an application for the grant of a new
permit. A close reading of sub-sections (1) to (7) demonstrate
c 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). It is not as if such procedures
prescribed in sub-sections (1) to (7) barring sub-section (6) are
D 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.
E 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-
F 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
G 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. [Paras 38, 39] [27-B-
D; 28-F-H; 29-A-B]
H 2. The requirement of giving a public hearing coupled with
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 3
AUTHORITY
requirement of personal hearing to the applicant as well as the A
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
B
living in that area can voice his grievance or support before the
Regional Transport Authority in such a public hearing.
[Para 40)(29-C-D)
R.Raghuram v. P. Jayarama Naidu and others 1990
(Supp) SCC 361 - affirmed.
c
Karnataka State Road Transport Corporation,
Bangalore v. B.A.Jayaram and others 1984 (Supp)
SCC 244 : 1984 SCR 768 - overruled.
3. Section 68-B of the Act which falls under Chapter IV-A
states that all the provisions contained in Chapter IV-A shall have D
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 is concerned, there will be no
inconsistency with any of the provisions contained in Chapter E
IV-A. 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 681 of the Act. [Para 43][30-D-E)
4. The formulation of a scheme is to be prepared and
published by a State Transport Undertaking in respect of the F
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 G
interest and such scheme should be prepared and published.
Once such a scheme is formulated with the above avowed objects
in mind and is notified, under Section 68D, every person who is
already providing transport facility in that area or route or any
association representing persons interested in the provision of
H
SUPREME COURT REPORTS [2016)8 S.C.R.
A 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
B
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 scl eme. Under Section 68E of the
Act, the scheme can be cancelled in the form in which it was
c 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
D 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
E 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. [Paras
44, 45][30-F-H; 31-A-B, C-F]
5. Section 68FF creates a restriction on grant of permits in
F 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
G 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
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 5
AUTHORITY
Undertaking alone is exclusively permitted to operate the service A
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 'RAGIIURAM' and 'EGAPPAN',
such operation by other private operators gets frozen and while
B
interpreting Section 57 (8) of the Act that application for variation
will be nothing but an application for grant of a new llermit.
Therefore, even in respect of protected operation under the
scheme of any existing operator, as 011 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 c
such operation was permitted and not beyond. Once things get
frozen, the frozen stage can be changed only by way of a permitted
process. Herc, 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
D
provision by which such modification or alteration can be effected
can be only by applying Section 68E, which is the legally
pc1·missible 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 E
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
F
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. Any other interpretation would run contrary to the prescription
contained in Chapter IV-A of the Motor Vehicles Act. (Paras 46, G
47)(31-G-H; 32-A-C, D-G]
6. The legal propositions are:
Chapter IV-A supersedes any inconsistent provisions in
Chapter IV. The policy of the Legislature is clear from Section
H
6 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 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
B
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
c route I area covered by the scheme will get frozen by virtue of
operation of Section 68FF. The effect of Section 68FF can be
altered I modified I 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
D 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 oflaw, laid down
E 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
F
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 I Area covered by the
G 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
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 7
AUTHORITY
service by the State Transport Undertaking in relation to any A
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
8
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). [Para 50)(33-E-II; 34-A-H; 35-A-C]
Pa11diya11 Roadways Corporation Ltd. v. MA.Egappan
1987 (2) SCC 47 : 1987 (2) SCR 391; Adarsh Ti·avels
Bus Service and another v. State of UP. and others c
(1985) 4 sec 557- approved.
Karnataka State Road Transport Corporation,
Bangalore v.· Karnataka State Transport Authority,
Bangalore and others 1987 (Supp) SCC 648- referred
to. D
Case Law Reference
1990 (Supp) sec 361 affirmed Para 1
1984 SCR 768 overruled Para4
1987 ( 2 ) SCR 391 approved Para4 E
(1985) 4 sec 557 approved Para4
1987 (Supp) sec 648 referred to Para4
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4480
of1998.
F
From the Judgment and Order dated 23.02.1998 of the High Comt
of Judicature at Madras in C.R.P. No. 553 of 1988
WITH
C. A. No. 4481of1998, C. A. Nos. 7195-7197 of2001, C. A.
Nos. 2782, 7299 of2002, C.A. Nos.3605, 3606, 3633, 3731-3733, 3853 G
of2003, SLP (C) Nos. 22621-22622 of2015.
K. K. Venugopal, Ms. Kiran Suri, A. Mariarputham, Amit Singh
Chaddha, Thomas P. Joseph, Raju Rammachandran, Sr. Advs.,
R. Venkataramani, AAG, N. D. B. Raju, M. E. Nagesh, Rohit Bhat,
Guntur Prabhakar, S. J. Amith, Gautam Kumar, Dr. (Mrs.) Vipin Gupta, H
8 SUPREME COURT REPORTS [2016] 8 S.C.R.
A M. Palani, Ms: Aruna Mathur, Avneesh Arputham, Yusuf Khan,
Ms. AnuradhaArputham, M/s. Arputham Aruna & Co., Balaji Srinivasan,
Ms. Vaishnavi Subrahmanyam, Ms. Srishti Govil, Dilpreet Singh, Mayank
Kshirsagar, Ms. Pratiksha Mishra, Arunava Mukherjee, M. Gireesh
Kumar, Sriram P., Ankur S. Kukarni, Yijay Kumar, Jayanth Muth Raj,
Ms. Malavika J., Sureshan P., Arunava Mukher, N. D. B. Raju,
B
N. Ganpathy, M. E. Nagesh, B. Balaji, Muthuvel Palani, Vikram Aditya
Narayan, Ms. M. Yijay Kumar T., Venkateshwar Rao Anumolu, Goli
Rama Krishna, Shashwat Goel, J. N. Singh, G. Ramakrishna Prasad,
R. Ayyam Perumal, A. V. Rangam, Ms. D. Bharathi Reddy, K. V. Mohan,
R. S. Hegde, Ms. Farhat Jahan Rehmani, Shanti Prakash, Rajeev Singh,
c V. N. Raghupathy, Advs. for the appearing pa1ties.
The Judgment of the Court was delivered by
FAKKIR MOHAMED IBRAHIM KALIFULLA, J. I. This
reference to this Constitution Bench was made by a Division Bench of
D 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 vi de order dated 01.12.2004. As the issues raised and argued
E before us were common, on the question referred, we heard arguments
in common.
2. We heard the arguments of Mr. K.K. Venugopal, learned senior
counsel for the appellant in the C.A.NoJ606/2003, Ms. Kiran Suri,
learned senior counsel for the appellant in C.A.No.4480/1998, Mr. A.
F Mariarputham, learned senior counsel for the appellant in C.A.Nos. 7195-
7197/200 I, Mr. Amit Singh Chaddha, learned senfor counsel for the
appellant in C.AJ853/2003 and Mr. Raju Rammachandran, learned
seniOr counsel for the respondent(s) in C.A.No.4480/I 998.
3. Mr. K.K. Venugopal, learned senior counsel made his leading
G
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.
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 9
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
4. Mr. K. K. Venugopal, learned senior counsel for the appellant A
in C.A.3606 of 2003 made & 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 we! I.
Learned senior counsel in his submissions, fairly pointed out that the
issue concerned in this reference has to be considered by referring to
B
the decisions reported in Karnataka State Road Transport Corporatiou,
Bangalore Vs. B.A.Jayaram tmd others - 1984 (Supp) SCC 244
(hereinafter referred to as 'JAYARAM'), Pa11tliya11 Roadways
Corporation Ltd. Vs. M.A.Egappan - 1987 (2) SCC 47 rbereinafter
referred to as 'EGAPPAN'), Adarsh Travels Bus Service a11d another
Vs. State of U.P. and others - (1985) 4 SCC 557 (hereinafter referred c
to as 'ADARSH TRAVELS'), Kttrtutlttktt State Ro(l(I Transport
Corporation, Bangalore Vs. Karnataka Stttle Transport Authority,
Bangalore and otlters -1987 (Supp) SCC 648 (hereinafter referred
to as 'KSRTC') and R.Rag/111ram (supra) (hereinafter referred to as
'RAGHURAM').
D
5. 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 of2003 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
E
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 l 0.01.1985 to the State Transport
Authority (STA), Bangalore for grant of four additional singles and one F
additional vehicle by the order dated I 0.01.1985, 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 ofthe learned Single Judge in
G
C.R.P.No.553of1988 and the order of the Division Bench in W.A.No.750
and 780 of2002 dated 23.03.2002 pursuant to which the present appeal
came to be filed.
6. The learned senior counsel referred to Section 48(3)(xxi),
Section 57(8) and Section 63 of the Motor Vehicles Act, 1939 (hereinafter
H
10 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 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, 688, 68FF falling under Chapter IV-
A of the Act while making his submissions.
B 7. 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
c 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
D 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
E 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.
8. Lastly, he contended that the judgment in 'JAYARAM',
F 'RAGIIURAM' 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 bed isturbed in public interest.
9. Ms. Suri, learned senior counsel for the appellant in
G C.A.No.4480of1998, after referring to the list of dates rightlyfornmlated
the questions as under
(i) Whether variation is permissible in a notified scheme route?
and
(ii) Whether the Tamil Nadu Act disentitles counter signature of
l-1
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 11
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
interstate permit variation? A
I 0. 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 B
implication ofSection 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.
11. Mr. Mariarputham, learned senior counsel for the appellant in
C.A.Nos.7195-7197 of2001, submitted thatthe question as regards the c
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.
12. Mr. Chaddha, learned senior counsel for the appellant in
C.A.No.3853 of2003 after making reference to the scheme concerning
D
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. E
13. As against the above submissions, Mr. Raju Ramachandran,
learned senior counsel forthe respondent in C.A.4480of1998 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 of2003. The learned
senior counsel further submitted that having regard to the implication of F
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.
14. Having heard learned senior counsel for the appellants and
the learned senior counsel for the respondent, we proceed to answer the G
reference as under.
15. 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
H
12 SUPREME COURT REPORTS (2016] 8 S.C.R.
A 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
B
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.
16. 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
c '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
D 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 'ADARSJI TRAVELS' made in 'KSRTC', there
was no specific terms of reference made in either of the two orders.
E However, when we refer to the case which got abated viz.,
'RAGJIURAM', while dealing with an identical issue, this Com1 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:
F .. 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
G 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.
17. It is wot1hy to note that before formulating the said question
H
G.T. VENKATASWAMY REDDYv. STATE TRANSPORT 13
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
for reference to a Constitution Bench, the learned Judges cul led out the A
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'.
18. Keeping the said perception which weighed with this Court in B
'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' RAGl/URAM' to the Constitution Bench. Therefore, though
the said reference stood abated because of the demise of the appellant
c
therein, the question of law referred to the Constitution Bench rightly
surviyed and the said question requires to be answered in this reference.
19. 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), 'ADARSHTRAVELS'(supra), 'EGAPPAN' D
(supra) - 'KSRTC' (supra) and 'RAGIIURAM' (supra), apart from
the relevant provisions falling under Chapter IV and JV-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. E
20. 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 F
question referred before us. With that prelude, we proceed to first analyze
the decisions mentioned above.
21. 'JAYARAM' (supra) is the stai1ing 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 G
'JAYARAM' has been formulated in paragraph 9 which reads as under:
"9. On the above rival contentions, two main questions
arise for our consideratio11, 11a111ely,
(1) Whether sub-section (8) of section 57 creates a legal
H
14 SUPREME COURT REPORTS [2016) 8 S.C.R.
A 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
B 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 ? "
22. Before answering the above questions the learned Judges
made a detailed reference to the various provisions contained in Chapter
c 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
D 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
E 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 lmv. Considerable emphasis 11•ere placed
on behalf of the Appellant on the words '"shall be treated
F 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
G new permit and it, therefore, followed as a corol!aly
that such an application if granted would result in the
grant qf a new permit. "
23. Thereafter, the learned Judges referred to sub-section I to 10
,of Section 57 of the Act in detail and then stated as under in paragraph 16:
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 15
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
"' 16. ......... . Sub-section (8) comes immediately after A
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
B
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 carriers permit. It is
for the purpose of providing that the procedure to be
followed in the case of an application made under sub- c
section (81 is to be the same as the procedure to be
followed in the case of an application for a new permit
that sub-section (81 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
D
(7). This is a very different thing from enacting a legal
fiction ......... " (Underlining is our.1)
24. While stating the law as above, the learned Judges sought
reliance upon the decision reported in Mis Shiv Chand Amolak Chand
v. Regional Transport Authority & Anr. -(1983) 4 SCC 433 wherein E
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 m1 application for F
variation of the conditions of a permit referred to in
sub-section (8) of Section 5 7 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 G
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
gpplication for variation the procedure are.scribed by
H
16 SUPREME COURT REPORTS [2016] 8 S.C.R.
A sub-sections (3) to (7) of Section 57 and not for the
/21!IPOSe 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)
25. Having thus answered the first question by holding that
B 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-
c 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
D 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
E permits ofthe existing permit-holders have been rendered
ineffective. Furthe1; 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
F portion more than once ca1111ot any ma11ner affect the
services operated by the Appella11t on such portions
since no passengers are allowed to be picked up or set
down or such portions. All that would happe11 is that
these vehicles, in the course of their inter-State operation
G would traverse these portions of the notified routes
without in any way operating as stage carriages for
such portions."
26. 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
H reference to the provisions contained in Chapter IV-A was made in the
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 17
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
said decision, before reaching the ultimate conclusion in paragraph 18, A
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
B
view expressed in 'JAYARAM' can be approved or disapproved.
27. 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 c
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 D
drop passengers on the overlapping part of the route?
The answer to the question really turns on the terms of
the sche111e rather than on the provisions of the statute,
as we shall presently show."
28. The Constitution Bench while dealing with the said question, E
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 clearfro111 Section
68-C that the State Transport Undertaking may initiate F
a sche111e 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 G
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
H
18 SUPREME COURT REPORTS [2016) 8 S.C.R.
A may be prescribed."
29. Thereafter in paragraph 6 it was held as under:
"6. It is thus seen that while the provisions of Chapter
JV-A are devised to override the provisions of Chapter
JV and it is expressly so enacted, the provisions of
B 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
c 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)
D 30. 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) oftheAct in paragraph 7. It will be useful to
refer to the said part of the judgment which is to the following effect:
E "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 sche111e is published under
sec. 68-D in relation to any area or route or portion
thereof. whether to the exclusion. complete or partial
F 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
G 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 anv part or
portion of the notified route or area on the mere ground
that the per111it as originally granted to him covered the
notified route or area....... .. . ... ... ... . ... ... . The question
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 19
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
is one of weighing in the balance the advantages A
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
B
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 tin. ~s permits for plying stage
carriages from a point a short distance beyond one c
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
D
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) E
31. 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 F
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 G
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 ........ "
32. With that we shall now refer to the so-called conflicting H
20 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 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. 011 June 30, 1976,
as stated earlier, the approved scheme was published
B under Section 68-D of the Act in the Tamil Nadu
Government Gazette in re!>pect 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 comp 'etely all other persons from
operating their stage carriage services under permits
c covering the entire route, referred to above except those
persons mentioned in A1111exure 11 to the said scheme
without prejudice to any future modifications, variations
etc. of their permits. The operators whose names had
been mentioned in Annexure 11 to the scheme were
D persons who were existing operators on the different
sectors of the not!fied route on the date of the
publication of the scheme. The respondent ll'as 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
E mentioned in Annexure 11 to the scheme. He ll'as 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
F 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
G 23.12.1982 he obtained from the Regional Trans- port
Authoritv 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.
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 21
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
An appeal filed against that order was dismissed by the A
State Transport Appellate 'fribunal. 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 5pecial leave is filed against the above order of the
B
High Court. " (Underlining is ours)
33. Thereafter, while dealing with.the provisions contained in
Chapter IV-A, it was held as under in paragraph 4:
"4 ............ In the context in wl'ich Section 68-F{l-D)
appears we find it difficult to agree that the application c
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 111ischief of Section 68-F{l-D) of the Act.
There is no justification to limit the application ofSection
68-F{l-D) of the Act to only applications for fresh D
per111its 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 E
whose variation he is seeking by the inclusion of a route
or a part thereof in respect of which a sche111e is
published under Section 68-C of the Act ought not to
make any difference. The principle underlying Section
68-FO-D> of the Act is that the number of services on
such a route should be frozen on the publication of a F
scheme under section 68-C of the Act. It is not, howeve1;
necessary for us to pursue the applicability of Section
68-F(l-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 G
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
H
22 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 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 Qf the Act. The effect of these provisions
B
has been summarised bv a Constitution Bench of this
Court in Adarsh Travels Bus Service and Another Vs.
State of U.P. and Others, [19857 4 S.C.C. 557.
Chinnappa Reddy, .!. speaking for the Constitution
Bench observed at pt1ge 566 thus: ..... " (Emphasis
C added)
34. 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
D 68-C of the Act. It is also worthwhile to note that the word of caution
expressed in 'ADARSII 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.
E 35. The last of the decision which requires to be noted in the
present context is the one repo1ted 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
F 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 'ADARSII TRAVELS'
does not apply to the facts of that case and without any discussion much
less detailed discussion, dismissed the appeal.
G 36. 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(lD) and 68-FF of the Act, which
are as under:
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 23
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
"57(8) An application to vary the conditions of any A
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
B
permit or a public carriers 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 c
any area to increase the frequency of the service so
provided, without any increase in the number of
vehicles. "
***** D
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 lmv
for the time being in force or in any instrument having E
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, F
economical and properly coordinated road transport
service, it is necessary in the pub,lic 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 G
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
H
24 SUPREME COURT REPORTS [2016) 8 S.C.R.
A 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
B 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
c 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
D (iii) any local authority or police authority within whose
iurisdiction 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.
E (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.
F (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 :
G
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. "
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 25
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
68E. Cancellation or modification of scheme:- (1) Any A
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
B
the scheme is proposed to be cancelled or modified as
if the proposal were a separate sche111e:
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 c
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 re5pect of the following 111atters, namely:-
(a) increase in the number of vehicles or the number of D
trips;
(b) change in the type of vehicles without reducing the
seating capacity ;
(c) extension of the route or area, without reducing the E
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, (fit considers F
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 G
Government, is likely to be affected by the proposed
modification, ' ·
an opportunity of being heard in respect of the proposed
modification.
H
26 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 68F(J-D) Save as otherwise provided in sub-section (IA)
or subsection (IC), 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
B 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
c 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.}
D
*****
68FR 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 Tramport Authority,
E 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
F pursuance of an approved scheme, the State Transport
Authority or the Regional Transport Authority, 'as the
case may be, may grant tempora1y permits to any person
in respect of such notified area or notified route subject
to the' condition that such permit shall cease to be
G effective on the issue of a permit to the State Transport
Undertaking in re~pect of that area or route. "
37. At th is juncture, it is necessary to state that in the decision in
'JAYARAM' and 'ADARSII 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
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 27
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
above referred to decisions can be noted and followed without making A
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.
B
38. (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 numberofvehicles
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
c
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
(I) to (7), we can presently demonstrate how such provisions mandates
compliance of various SJJ.ecitic requirements, which are intricately D
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 E
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 tiling of the application should be mandatorily made by giving not
less than six weeks time gap from the desired date of the applicant for F
the varied condition to take effect.
(ii) Under sub-section (3), once the Regional Transport Authority
receives an application for variation ofa 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 G
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
H
28 SUPREME COURT REPORTS [2016] 8 S.C.R.
A 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
B 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.
c (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.
D 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 Transpo11
Authority rejecting an application for variation, he should give reasons in
writing for such rejection.
E
39. 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
F 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-
G 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 attheve1ythreshold. Similarly,
if the Regional Transport Authority failed to follow the statutory
prescription in the matter of pub Iication of such an application, by following
the time limit and the other prescribed procedure under the Rules, then
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 29
AUTHORITY [F AKKIR MOHAMED IBRAHIM KALIFULLA, J.]
again, the consideration of the application itself may not take place until A
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
B
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.
40. The requirement of giving a public hearing coupled with
requirement of personal hearing to the applicant as well as the person
c
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 D
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
E
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 F
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 resu It in lack of coordination.
41. Having thus analysed the entire Section 57 of the Act barring G
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
H
30 SUPREME COURT REPORTS [2016) 8 S.C.R.
A 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.
42. 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
B 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 'JAYARA./11'. We also state that the contra
opinion expressed in 'RAGIIURAM' will hold good.
c
43. With that when we come to the other Sections with which we
want to make an analysis, in the foremost, reference to Section 68-8 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
D 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 wi II be no inconsistency with any of the provisions
E 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 681
of the Act.
44. Keeping the said broad statutory prescription vis-a-vis Section
F 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
G 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 ofa scheme by a State Transport Undertaking, should
have the basic consideration of efficient, adequate, economical and
H properly coordinated transport service in public interest. Once such a
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 31
AUTHORITY [FAKKIR MOHAMED IBRAHIM_KALIFULLA, J.]
scheme is formulated with the above avowed objects in mind and is A
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
B
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.
45. Under sub-section (2) of Section 68D of the Act, the State
Government after considering the objections and after giving an c
opportunity of hearing to the objector or his representative as well as the
representatives of the State Transport Unde11akings can either approve
the scheme as proposed or give a modified scheme. Under Section 68£
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 D
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 68£ of the Act, the
State Government is fully empowered to modify any scheme published E
. under sub-section (3) ofSection 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 F
can be issued with the required permits.
46. 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 G
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
H
32 SUPREME COURT REPORTS [2016) 8 S.C.R.
A 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, ifthe operation by any existing
B
permit holder is saved either fully or partially that as rightly stated in
'RAGIIURAM' 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
c 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.
47. Once things get frozen, the frozen stage can be changed only
D 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, ifthe 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
E in which the said frozen stage is sought to be altered or modified, that is
totally prohibited under the statutory provisions. Therefore, ifunder the
scheme, ifthe permit gets frozen, within the prescriptions contained under
the scheme and if a variation is to be considered forthat permit either by
way of increase in the number of trips or addition of vehicle without any
F 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 JV-A. In our considered opinion, any other
G interpretation would run contrary to the prescription contained in Chapter
IV-A of the Motor Vehicles Act.
48. 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
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 33
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
alternate available is what is provided under Section 68E of the Act A
which again is within the jurisdiction of the State Trans po ii Unde1iaking
or the State Government under sub section 1 or 2 as the case may be.
49. 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 B
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, c
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 pe1iain to the variation
applied for both by way of increase in trips as well as increase of vehicles.
50. Having analysed the above referred to decisions and the D
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:
(a)Chapter IV-A supersedes any inconsistent provisions in E
Chapter IV.
(b)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, cconomical and properly coordinated road F
transp01i service to be run and operated by the State
Transpo1i Undertaking in relation to any area or route or
portion thereof. It may do so if it is necessary in the
public interest.
(c) Grant of variation under Section 57(8) will be as good G
as grant of a new permit.
(d)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
I-I
34 SUPREME COURT REPORTS [2016] 8 S.C.R.
A (e)Once a scheme formulated under Section 68D gets
approved under 680(3) of Chapter IVA, then all the
permits in the route I area covered by the scheme will
get frozen by virtue of operation of Section 68FF.
(f)The effect of Section 68FF can be altered I modified I
B -cancelled only in the manner as provided for under Section
68E and in no other manner.
(g)By viltue 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
C by an Approved Scheme.
(h)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
D Section 68FF.
(i)The proposition of law, laid down by this Court in
'JAYARAM' impliedly stood overruled in 'AJJARSH
TRAVELS'.
U)The econo111y and coordination, two of the factors, which
E govern the Approved Scheme, will be seriously infringed
if the variation is to be granted of the existing permit
condition.
(k)Even if there is an interstate agreement under Section
63 of the Act for increasing the number of trips, such an
F agreement cannot override the provisions of Chapter IV-
A by viltue of Section 688 of the Act. Section 63 being
in Chapter IV of the Act, the Scheme approved under
Chapter IV-A will prevail over it.
(I) The Approved Scheme will exclude the operation of other
G stage carriage services on the Route I Area covered by
the Scheme, except those whose names are mentioned
in the Scheme and to the extent to which such exception
is allowed.
(m)The provisions in Chapter IV-A are devised to override
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 35
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
the provisions of Chapter IV and it is expressly so enacted, A
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 (ADARSII TRAVELS).
8
(n)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
c
originally granted to him covered the notified Route or
Area (ADARSH TRAVELS).
51. Having regard to the above propositions, which we are able to
arrive at, we hold that the judgment reported in K"m"J"k" SJ(lfe Ro(/d
Tmnsport Corpor(lfion, B(/ng(l/ore Vs. B.A. J"y"r"m ""d others - D
1984 (Supp) SCC 244 is no longer a good law and the decision reported
in P(lnt/iy"n Rofldw"ys Corpor"tion Ltd. Vs. M.A. Egappfln - (1987)
2 SCC 47 stands approved which is in tune with the Constitution Bench
decision reported in Ad(lrslt Travels Bus Service (/lld <motlier Vs. St(lfe
of U.P. and otlters - (1985) 4 sec 557 and the observations made in E
R.Raglmram Vs. P. Jayarama Naidu am/ ot!ters -1990 (supp) SCC
361 ?tands approved.
52. 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 F
wherever it is applicable.
Devika Gujral Referred question a~swered.
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