Holding

In the absence of a scheme under Section 99 covering the routes, Section 80(2) prevails and the Regional Transport Authority cannot refuse a permit, so the tribunal’s grant of permits was valid.

Summary

The State Transport Appellate Tribunal granted permits to certain applicants to operate mini‑buses on specific routes in Punjab. Existing private permit‑holders challenged the grant, and the Punjab and Haryana High Court set aside the tribunal’s order. On appeal, the Supreme Court examined whether the State Government could, under the Motor Vehicles Act, 1988, refuse such permits on the basis of a scheme under Section 99. The Court held that the scheme in force did not designate the routes in question as exclusive to the State Transport Undertaking, and therefore Section 99 did not apply; consequently Section 80(2) – which mandates that a Regional Transport Authority shall not ordinarily refuse a permit – governed the matter. The tribunal’s decision to grant the permits was thus upheld. The appeals were allowed, the High Court’s order was set aside, and the tribunal’s order was restored.

Issues considered

Whether Section 99 of the Motor Vehicles Act, 1988 empowers the State Government to restrict the grant of permits to private operators on routes not covered by a scheme.
Whether, in the absence of a scheme covering the routes, Section 80(2) of the Act obliges the Regional Transport Authority to grant permits to private operators.
Whether the State Transport Appellate Tribunal was correct in granting permits to the appellants.

Legislation cited

Motor Vehicles Act, 1988s. 71, s. 71(3)(a), s. 80(2), s. 99

Subjects

Motor Vehicles ActSection 80Section 99permit liberalizationmini‑busstate transport schemepublic interest

Judgment

A JAGDIP SINGH
v.
JAGIR CHAND AND ANR.

OCTOBER 10, 2001

B , [M.B. SHAH AND R.I\ SETHI, JJ.]

Motor Vehicles Act 1988 :

Sections 80(2) and 99:.__Pennit to operate mini bu~es on certain routes- ·~'I
Allowed by the tribunal-Challenged by pe1mit holders already running mini
c buses-High Court set aside the order-On appeal, held when scheme does
not provide that the routes are to be covered and operated completely or
partially by state transport undertaking, Tribunal was correct in :granting the
pennits.
...
D Sta~e Transport, Appellate Tribunal allowed the .grant. of permit to
the appellants to· operate mini buses. on certain routes. On challenge by
existing permit holders running mini buses High Court set aside the order
passed by the tribunal. Hence the present appeals.

Aliowing the appeal, the Court
E
HELD : 1. Tliere can be certain restrictiOn on the bus operators for
providing facilities to the passengers, but when Legislature provides that
permits should not, ordinarily, be refused and has brought about a
"
complete change in the policy of granting permit, it would be unreasonable
and unjust on the part of the State Authorities to continue their old
F practice. Further, in these days of liberalisation in all fields, that too when
people are talking of globalization, it would be unjust to put fetter on the
exercise of fundamental rights of those persons who intend to carry oil
business as transport operators. (17-F; G; H]

2. Under Section 80(2) of the Motor Vehicles Act, 1988 a Regional
G Transport Authority shall not ordinarily refuse to grant an application for 1'_ _
permit of any kind made at any time under the Act. Therefore, in view
of the scheme framed by the state government the transport authority was
not justified in rejecting the application for grant of permit to minibus
operators on a particular route as the Scheme does not provide that the
H routes are to be covered and operated completely or partially by the State
16
JAGDIP SINGH v. JAGIR CHAND [SHAH, J.] 17
fransport Undertaking. In such cases, Section 80(2) of the Act would be A
applicable, as under Section 99 of the Act, the State Government is not
empowered to provide that only few private operators would operate on
a particular route/routes. [18-A; 23-G-H; 24-A]

i Hans Raj Kehar v. State of U.P., (1975] 1 SCC 40 and Mithilesh Garg
· and Ors. v. Union of India and Ors., [1992] 1 SCC 168 referred to. B

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7085 of 2001.

·'
I From the Judgment and Order dated l.5.2000 of the Punjab and Haryana
High Court in C.W.P. No. 8198 of 1999.
c
With
• C.A. Nos. 7086, 7087, 7088 of 2001.

Jana Kalyan Das, Nidhesh Gupta, Naveen Kr. Singh for Ms. S. Jariani,
Ms. Naresh Bakshi, Ms. Rani Chhabra, Ms. Sudha Pal, Neeraj Kr. Jain for D
Aditya Kr. Chaudhary, Bharat Singh, for Ugra Shankar Pd., Inderbir Singh
Alag, Rajiv Sharma, R.S. Suri (N.P.), Sudhir Walia for M.S. Dahia, for the
for the appearing parties.

The Judgment of the Court was delivered by

SHAH, J. Leave granted.

Despite the legislative intent under the Motor Vehicles Act, 1988 to
increase the number of buses on different routes for the convenience and
benefit of travelling public, there is reluctance on the part of the authorities
to implement the same. Having reached at a saturation point wherein Permit F
Raj caused lot of inconvenience to the bus operators as well as to the general
public to a large extent, the same is sought to be continued. There cannot
be any doubt that there can be certain restrictions on the bus operators for
providing facilities to the passengers, but when Legislature provides that pennit
should not, ordinarily, be refused and has brought about a complete change 0
) in the policy of grauting permit, it would be unreasonable and unjust on the
part of the State Authorities to continue their old practice. Further, in these
days of liberalization in all fields, that too when we are talking of globalization,
il would be unjust to put fetter on the exercise of fundamental rights of those
persons who intend to carry on the business as transport operators. H
18 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
A In these appeals, the order passed by the High Court of Punjab and
Haryana iit Chandigarh setting .aside the orders passed ~y the State Transport
Appellate Tribunal ,granting permits to operate mini buses on certain routes
to the appellants, is challenged. Orders passed by the State Transport Appellate
Tribunal were not challenged by the State Transport Undertaking or the State
Government but were challenged by the Permit Holders who were running
mini buses. It is true that those who are having permits to operate on certain
routes would object to the grant of permit to other operators as it is likely to
affect their monopoly. This is bound to be there in all fields of industry or
business. At the same ·lime, grant or refusal of such permits is required to ..
I

be governed by the provisions of law.
,C
The objects and reasons of the Motor Vehicles Act, 1988 inter alia
provides that to take care of:- .,_

(a) the fast increasing number of both commercial vehicles and
pers9nal vehicles in the country; aiid
D
(b) ~implification of procedure and p~licy liberalizationt) for private
. sector operations in the road transport field; ,
(

the provisions are made under the Act.
E This legislative policy is reflected in Section 80 (2) of the Motor Vehicles
Act, 1988 (hereinafter refe1Ted to as "the Act") which inter alia provides that
a Regional Transport Auth0rity shall not ordinarily refuse to grant an application
for permit of any kind made at any time under the Act.

p As early as 1974, this Court in case of Hans Raj Kehar v. State of U.P.,
[1975] 1 SCC 40 emphasised the need of having more and more buses for
. the public convenience and observed thus: -

" ... The notification removes the bar created by the limit o~ the
number of permits for buses which could be issued and facilitates the
G issue of such permits to fresh applicants if they satisfy the requirement
of eligibility: It hardly needs much argument to show that the larger
number o{ buses operating on different routes would be for the
convenience and. benefit of the travelling public .and as such would
'be in the public interest. Any measure which results in larger number
H of buses. ·operating on various routes would necessarily eliminate or
JAGDIP SINGH v. JAGIR CHAND [SHAH, J.] 19
in any case minimise long hours of waiting at the bus stands_. It would A
also relieve congestion and provide for quick and prompt transport
service. Good transport service is one of the basic requirements of
a progressive society. Prompt and quick transport service being a
great boon for those who travel, any measure which
. provides
.
for such
.;

an amenity is in the very nature of things in the public interest."
B
Further in Mithilesh Garg and Ors.. v. Union of India and Ors., (1992)
"! SCC 168, the existing bus operators challenged the validity of Section 80
of. the Motor Vehicles Act, 1988 on the ground that they were adversely
affected in exercise of their right under Articles 14 and 19 of the Constitution
of India. The Court negatived the said contention by holding that it is only c
the State which can impose reasonable restrictions within the ambit of Article
19(6) of the Constitution of India on the guaranteed rights of every citizen
whether rich or poor, to take up and carry on, if he so wishes, the motor
transport business. Further, after considering the provisions of the Repealed
Act with regard to the grant of permit and sections 71, 72 and 80 of the new
D
Act, the Court observed thus: -

" .... The scheme envisaged under Sections 47 and 57 of the old
Act has been completely done away with by the Act. The right of
existing operators to file objections and the provision to impose limit
on the number of permits have been taken away: There is no similar E
provision to that of Sections 47 and 57 under the Act.· The Statement
of Objects and Reasons of the Act shows that the purpose of brining
in the Act was to liberalise the grant of permits. Section 71(1) of
the Act provides that while considering an application for a stage
carriage permit, the Regional Transport Authority shall have regard
F
to the objects of the Act. Section 80(2), which is the harbinger of
liberalization, provides that a Regional Transport Authority shall not
ordinarily refuse to grant an application for permit of any kind made
at any time under the Act. There is no provision under the Act like
that of Section 47(3) of the old Act and as such no limit for the grant
of permits can be fixed under the Act. There is, however, a provision G
)
under Section 71(3)(a) of the Act under which a limit can be fixed
for the grant of permits in respect of the routes which are within a
town having population of more than five lakhs."

The learned counsel for the respondent bus operators relied upon the
20 SUPREME COURT REPORTS . [2001] SUPP. 4 S.C.R.
.A provisions of Section 99 of the Act and submitted that under the scheme
framed by the State Government, the competent authority can restrict grant
of permits to the bus operators and therefore, the Transport Autho{ity was
justified in rejecting the application for grant of permit to mini buses operators
on a particular route ..
B Hence, the question is whether the State Government has framed any
s~ch scheme. It is true that under Chapter VI, there are "Special provisions
relating to State Transport Undertakings". Section 98 also provides that the
provisions of Chapter VI and the rules and orders made thereunder shall have
effect notwithstanding anything inconsistent therewith contained in Chapter V
c which includes Section 80. Thereafter sub-section (1) of Section 99 reads as
under: -

"99. Preparation and publication of proposal regarding road
transport service of a State Transport Undertaking. (l) Where any
D State Government is of opinion that for the purpose of providing an
efficient, adequate, economical and properly co-ordinated road transport
·service, it is necessary in the public interest that road transport
services in general or any particular class of such service in relation
to any area or route or portion thereof should be run and operated
by the State Transport Undertaking, whether to the exclusion, complete
E or partial, of other persons or otherwise, the State Government may
formulate a proposal regarding a scheme giving !1articulars of the
nature of the services proposed to be rendered, the area or route
proposed to be covered and other relevant particulars respecting
thereto and shall publish such proposal in the Official Gazette of the
. State formulating such proposal and in not less than· one newspaper
in the regional language circulating iii the area or route proposed to
be covered by such scheme and also in such other manner as the State
Government formulating such proposal deem fit."

. From the aforesaid section, it is apparent that before framing the scheme,
G
the State Government should arrive at a conclusion ·that: -

(1) for the purpose of providing an efficient, adequate, economical
and properly co-ordinated road transport service;

H (2) it is necessary in the public interest;
JAGDIP SINGH v. JAGIR CHAND [SHAH, J.] 21
(3) that the roa~ transport services in general or in particular class A
of such service in relation to any area or route or portion thereof
should be run and operated by the State Transport Undertaking;

(4) to the exclusion, complete or partial of other persons or otherwise;

(5) the State Government is required to formulate a proposal regarding B
the scheme giving particulars ·

(a) nature of services proposed to be rendered,

(b) the area or route proposed to be covere4 and;
c
.. (c) other relevant particulars respecting thereto .

(6) and the State shall publish such proposal

(a) in the Official Gazette of the State formulating such D
proposal;

(b) in not less than one newspaper in the regional language
circulating in the area or route proposed to be covered by
such scheme; and
E
(c) in such other manner as the State Government formulating
-· such proposal deem fit.

Main purpose of the aforesaid section is to have some routes/area
reserved for the State Transport Undertaking, that too, for the purpose of
providing an efficient, adequate, economical and properly coordinated Road
F
Transport service. Further, such scheme must be in public interest, that is to
say, larger number of buses operating on different mutes for the convenience
and benefit of travelling public at a cheaper _rate. In such a scheme, some
routes can be reserved exclusively or partially for the State Transport
Undertakings. G

In the rejoinder affidavit it has been pointed out that in the State of
Punjab, the State Transport Undertakings are not running ~ni buses linking
_one village with ;.nother and as the State Transport Undertaking is not running
any mini bus linking the villages, the Regional Transp0rt Authority is bound H'
22 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
A by the provisions of Section 80 to grant permit.

At this stage we would refer to the alleged scheme upon which reliance
is placed by the learned counsel for the respondents. As such, the State
Government or the bus operators have not produced on record properly
B , modified scheme, but they have referred to the Notification dated 21st October,
1997 which seeks to modify the previous Scheme which was framed on 9th
August, 1990 by substituting some clauses. The relevant parts of the said
clauses are as u.nder:-

"(2). All Inter-state routes shall be operated by the State Transport
c Undertakings and operation~ or private operators whose permits were
valid for a period of three years from the date of the publication of
the scheme, shall remain unaffected.

Provided that the route operated by a private operator, which
became Inter~~tate route as a result of reorganization of the State of
n· Punjab in the year 1966, shall not be affected by the Scheme.

Provided lurther that the operations of any State other than State
. of Pu_njab or any _Union Territory including their private operators
operating on any route by virt~e of the reciprocal agreement or
permits granted by such other states and countersigned by the State
E Tran.sport Authority or by the ~egional Transport Authority concerned
as the· case may be, shall remain unaffected . "'·
. Provided further that a permit may be grantyd to a private
operator for operations of Air-conditioned buses from the District
Headquarter and important towns in the State of Punjab to the Union
F
. Territory,. Chandigarh.

(4). All future operations on monopoly routes shall be operated by
the State Transport Undertakings:

Provided that a private operator may be allowed to operate on
G
a portion of twenty percent of the monopoly route or up to the distance
of fifteen kilometers of the said route, whichever is less, where it is
necessary or is in public interest to do so:

Provided fm:ther that the permits granted by the Regional Transport .
H Authority before corning into force of the scheme to the private
JAGDIP SINGH v. JAGIR CHAND [SHAH, J.] 23
operators for operating on monopoly routes, wholly or on .portion A
thereof or on the routes in which the monopoly routes fall, shall
remain unaffected.

(7-A) While granting permits for operations on routes, linking one
village with another village without any city or a town or municipality,
in between the aforesaid two villages, or a route linking a village with B
the block headquarter or a muniCipality or city the use of the mini
buses may be allowed on the basis of passenger road transport needs
as· assessed by the State Transport Commissioner, Punjab from time
. to time.

Provided that: -
c
(e) The total length of each such route does not exceed 25
kilometers and the total operation per bus, does not exceed 250
kilometers per day.
D
(f) Not more than half of the total routes length runs across a
National Highway or State Highways.

(g) At least one of the terminal of the route shall be a village and
shall not include more than one municipality except on a local
route falling within the municipal limits of a town, municipality E
or city wherein both the starting and the terminating points may
be the same or may fall within the same town, municipality or
city, as the case may be, and

(h) It shall be ensured that the interest of the State Transport
Undertakings are not affected adversely on such routes." F
For the purpose of these appeals, clauses 2 and 4 are not at all relevant.
Clause (2) provides for all Inter-state routes and clause (4) provides for future
operators on monopoly routes which are to be operated by the State Undertakings.
Relevant clause is clause (7-A) and it nowhere reveals that it is in conformity
G
with Section 99 of the Act. Under Section 99 of the Act if the State Transport
Undertaking is to operate on a particular route, then only the scheme could
be made applicable. The aforesaid Scheme does not provide that the routes
mentioned in Clause 7(a) are to be covered and operated completely or partially
by the State Transport Undertaking. In .such cases, Section 80(2) would be
24 SUPREME COURT REPORTS [2001] SUPP. 4 S.C.R.
A applicable as under Section 99, the State Government is not empowered to
provide that only few private operators would operate on a particular route/
routes and Regional Transport Authority or other prescribed authority cannot
o;:ainarily refuse to grant an application for permit of any kind made at any
time under the Act.
B It is to be stated that in the present case, the order passed by the Appellate
Tribunal was not cliallenged by the State Government or by the State Transport
Undertaking, but was only challenged by the private bus operators. However,
in these appeals, it is not necessary to consider whether they were having any
locus standi to file petitions before the High Court.
c In the result, the appeals are allowed. Impugned orders passed by the
High Court are set aside. Orders passed by the Presiding Officer, State
Transport Appellate Tribunal, Punjab are restored. There shall be no order
as to costs.
•
NJ. Appeals allowed.

•