Holding

The 1959 approved scheme remains valid, the 1986 draft scheme has not lapsed, and any permits granted to private operators under Section 80 for the nationalised routes are illegal and must be cancelled.

Summary

The Supreme Court examined the status of the Saharanpur‑Shahdara‑Delhi route nationalised under a 1959 draft scheme of the Motor Vehicles Act, 1939, which had been approved on 29 September 1959. After a long delay, a fresh draft scheme was issued in 1986, but the Motor Vehicles Act, 1988 came into force in 1989. The Court held that the 1959 approved scheme remained valid and that the 1986 draft scheme had not lapsed under Section 100(4) of the 1988 Act. Consequently, permits granted to private operators under Section 80 of the Act for routes overlapping the nationalised route were illegal. The Court quashed those permits, ordered the draft scheme of 1986 to be approved within 30 days, and directed cancellation of any existing permits to the private operators. The appeals were allowed, restoring the exclusive right of the State Road Transport Corporation to ply the route.

Issues considered

The effect of Shri Chand v. Govt. of U.P. on the validity of the 1959 approved scheme as affirmed in Jeevan Nath Bahl v. State of U.P.
Whether the draft scheme dated 13 February 1986 stood lapsed under Section 100(4) of the Motor Vehicles Act, 1988
The legality of granting permits to private operators under Section 80 of the Motor Vehicles Act for routes overlapping the nationalised route
Whether corridor protection for private operators is permissible under the Act

Legislation cited

Motor Vehicles Act, 1939s. 68-C, s. 68-D, s. 68-F
Motor Vehicles Act, 1988s. 100(4), s. 217(2)(e), s. 80, s. 98

Subjects

Motor Vehicles Actnationalisation of routesSection 80 permitsSection 100(4) lapsepublic interestabuse of processcorridor protectionconstitutional lawArticles 14 and 19(1)(g)special leave petition

Judgment

A RAM KRISHNAVERMA ETC. ETC.
v.
STATE OF U.P. AND ORS. ETC. ETC.

MARCH 31, 1992

B [N.M. KASLIWAL AND K. RAMASWAMY, JJ.]

Motor Vehicles Act 1939 :

Sections 68-C, 68-D and 68-F Motor Vehicles Act, 1988-Sectimis 80
C and 98-Grant of pennit to private operators on nationalised routes-Draft
scheme published under old Act-Private operators obtaining permits under
new Act for routes covered by the schem~rant of pennit to any other
operator for the routes covered by the scheme-Whether illegal and without
jurisdiction-J.Vhether corridor protection permissible.

D Constitution of India 1950 :

Articles 136, 141, 142 and 226 Court should neutralise any undeserved
and unfair advantage gained by party invoking its jurisdiction.

Precedent~~racrice and Procedure--Supreme Court two Judge bench
E not to over rule decision of rliree judge bench.
Administrative Law.

Natural Justice-l'rinciple of right to hearing-Forfeiture of-When
party obtains undue advantage by protracting proceedings and nullifying
F objective.

To nationalise the Saharanpur - Shahdara - Delhi route a draft
scheme dated 26th February, 1959 was published, and the approved
scheme published on September 29, 1959 was quashed by the high Court
G by judgments dated October 31, 1961 and February 7, 1962 as against 50
operators and being upheld against other SO operators. The State Govt.
was permitted to given fresh hearing to the 50 objectors, on the basis of
the original proposal which was upheld in Jeewan Nath Bahl & Ors. v. State
ofU.P.

H Out of the 50 operators some filed successive suits and obtained
378
R.K. VERMA v. STATE OF U.P. 379

in.iuction from different courts scuttling the hearing and keeping it pend- A
ing for well over 25 years.

A writ petition was filed in this Court assailing, that the delay in
approving the scheme amounts to an abuse of process of law, and that
public interest thereby suffered, and the Court held in Shri Chand etc. v.
Govt. of U.P. & Ors., (1985] Suppl. 2 SCR 688 that the delay of26 years in B
disposing of the objedions resulted in violation of Articles 14 and 19(1) (g)
of the Constitution, and accordingly quashed the draft scheme dated
February 26, 1959. The Government was directed to frame the scheme
afresh, if necessary.

Pursuant thereto the U.P. State Road Corporation published the
c
draft scheme on February 13, 1986. While it was pending the Motor
Vehicles Act 59 of 1988 came into force with effect from July 1, 1989.
Bulandshahr to Delhi route was also nationalised in the approved scheme
published in the State Gazette dated September 27, 1986.
D
After the 1988 Act came into force, the respondents applied for and
were granted permits for Saharanpur to Ghaziabad via Shahdara 1·outes
etc.

The appellants filed the writ petitions in the High Court and the
same wer~ dismissed by judgment dated July 23, 1990. The draft scheme E
published in 1986 was held by the hearing authority to have been lapsed
by operation of Section 100(4) of the Act.

In the writ petition filed by the S.T.U. the High Court by its judgment
dated March 16, 1990 held that the draft scheme stood lapsed within one
year from the date of the publication of the draft scheme, and accordingly F
upheld the order of the hearing authority. S.L.P. No. 6300/91 was filed
against this judgment.

Special Leave Petition Nos. 9701/90, 9702/90 and 2083/91 were filed
aga~nst the High Court's judgment dismissing the writ petitions in which G
grant of permits under Section 80 of the Motor· Vehicles Act on the
Muzaffarnagar-Chausana; Ghaziabad to Shahdara, Saharanpur to
Ghaziabad covered and partly overlapping nationalised routes were ques-
tioned.

On the questions : (1) what is the effect of Shri Chand etc. v. Govt. H
380 SUPREME COURT REPORTS [1992] 2 S.C.R.

A of U.P. over Jeevan Nath Bahl & Ors. v. State of U.P. and (2) whether the
draft scheme dated February 13, 1986 stood lapsed under Section 100(4) ~
of the Act.

Granting special leave and allowing the appeals, the Court,

B HELD : l(a) Consistent law laid down by this Court is that draft
scheme under Section 68-C and approved under Section 68-D of Chapter
IVA of the Repealed Act (Chapter VI of the Act), is a law and it has overriding
effect over Chapter IV of the repealed Act (Chapter V of the Act). It operates
against everyone unless it is modified. It excludes private operators from the
C area or route or a portion thereof covered under the scheme except to the
extent excluded under that scheme itself. The right of private operators to
apply for and to obtain permits under Chapter IV of the repealed Act
(Chapter V of the Act) has been frozen and prohibited. [389B-C]

(b) The nationalisation of Saharanpur - Shahdara - Delhi route
D approved and published on September 29, 1959 became final and to that
extent it cannot be said to have been quashed by this Court in Sri Chand's
case. The approved scheme is law operating against everyone except SO
objectors/operators and the writ issued by this Court cannot have the
effect of annuling the law. What was quashed and issue of fresh draft
E scheme pursuant thereto, relate to only of orginal draft scheme operative
against SO objectors/operators and no more. Even on principle, the
decision of a Bench of two Judges cannot have the effect of overruling the
decision of a Bench of three Judges. The fresh draft scheme under Section
68-C dated February 13, 1986 must, therefore, be construed to be only in
relation to SO existing operators as per the directions that ultimately
F emerged in Jeevan Nath Bahl's case. [389D-E]

Mysore State Road Transport Corporation. v. Mysore State Transport
Appellate Tribunal, (1975] 1 SCR 615; Adarsh Travels Bus Serv(ce v. State
of U.P. & Ors., (1985] Suppl. 3 SCR 661; H.C. Narayanappa & Ors. v. State
G of Mysore & Ors., (1960] 3 SCR 742; Nehnt Motor Transport Co-op. Soc. &
Ors. v. State of Rajasthan & Ors., (1964] 1 SCR 220 and S. Abdul Kltader
Saheb v. Mysore Revenue Appellate Tribunal & Ors., [1973] 1 SCC 357,
referred to.

2(a) On harmonious construction of ss.217(2)(e) and 100(4) of the
H Act, the draft scheme published under s. 68-C of the Repealed Act would
R.K. VERMA v. STATE OF U.P. 381

-.J.__ stand lapsed only if it is not approved within one year from the date when A
the Act came into force i.e. with effect from July 1, 1989 by which date it
was pending before the hearing authority and one year had not expired.
The hearing authority, therefore, wrongly concluded that the draft scheme
stood lapsed. The High Court also equally committed illegality following
its earlier view which stood overruled by this court in Krishana Kumar's
case. The view of the High Court and the hearing authority is therefore
B
clearly illegal. [389H-390B]

Krishna Kumar v. State of Rajasthan & Ors., [1991] 4 SCC 258,
referred to.

(b) The nationalisation of Saharanpur - Shahdara - Delhi route by
c
publication of the approved scheme on September 29, 1959 is operating to
the total exclusion of every private operator except U.P. State Road
Transport Corporation and 50 operators including the appellants whose
objections were upheld by the High Court in the first instance and merged
in the judgment of this Court in Jeevan Nath Bahl's case. [390C] D

(c) Under Section 80 of the Act no private operator has right to apply
for and obtain permits to ply the stage carriages on the approved or
notified route/routes or areas or portion thereof. The grant of permits to
the private operators on the respective routes or part, or portion thereof E
to provide transport service is therefore clearly illegal and without juris·
diction. [390E]

- Mithlesh Garg & Ors. v. Union of India & Ors., (1992) 1 SCC 168,
referred to.

(d) By operation of Section 98 of the Act, Chapter VI overrides Chap·
F
ter V and other law and shall have effect notwithstanding anything inconsis-
tent therewith contained· in Chapter V or any other law for the time being
inforce or any instrument having effect by virtue of such law. The result is
that even under the Act the existing scheme under the repealed Act or made G
under Chapter VI of the Act shall have over-riding effect on Chapter V
notwithstanding any right given to private operators in Chapter V of the Act.
No corridor protection to private operators is permissible. [390G-391AJ

(e) The 50 operators including the appellants/private operators have
been running their stage carriage by blatant abuse of the process of the H
382 SUPREME COURT REPORTS [1992) 2 S.C.R.

A court by delaying the hearing as directed in Jeevan Nath Bahl's case and
the High Court earlier thereto. As a fact, on the expiry of the initial period
of grant after September 29, 1959 they lost the right to obtain renewal or
to ply their vehicles, as this court declared the scheme to be operative.
However, by sheer abuse of the process of law they are continuing to ply
their vehicles pending hearing of the objections. [3910]
B
(f) While exercising its jurisdiction this Court would do complete
justice and neutralise the unfair advantage gained by the 50 operators
including the appellant in dragging the litigation to run the stage carriages
on the approved route on area or portion thereof and forfeited their right
C to hearing of the objections filed by them to the draft scheme dated A.
February 26, 1959. [391F]

(g) Moreover, since this court in Jeevan Nath Bahl's case upheld the
approved scheme and held to be operati~·e the hearing of objections would
D be a procedural formality with no tangible result. Therefore, the objections
outlived their purpose. They are, therefore, not entitled to any hearing
before the hearing authority. [391G-H]

Grindlays Bank Ltd. v. Income Tax Officer & Ors., [1980] 2 SCC 191,
referred to.
E ,
3. The grant of permits to all the respondents/private operators and
r·espondents Nos.7 to 28 in S.L.P. No. 9701/90 under Section 80 of the Act
or any others on the respective routes, parts or portions of the nationalised
routes of February 13, 1986 draft scheme are quashed. The hearing
F authority shall lodge the objections of the 50 operators including the
appellants in the appeals. The competent authority shall approve the draft
scheme of 19~6 within a period of 30 days an~ publish the approved scheme
in the gazette. The permits granted to the 50 operators or any others shall
stand cancelled from that date, if not having expired in the meanwhile. No
G permits shall be renewed. Action should be taken by respondents 3 to 4 in
S.L.P. No. 9701/90 to see that all the permits granted to the 50 operators
including the appellants are seized and cancelled. The U.P. State
Transport Corporation shall obtain the ~quired additional permits, if
need be, and put the stage carriages on the routes to provide transport
service to the travelling public !mmediately on publication nf the approved
H draft scheme in the State Gazette. [392A-D]
R.K. VERMA v. STATE OF U.P. [RAMASWAMY, J.J 383

..l. CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1198, A
1199, 1200 & 1201 of 1992.

From the Judgment and Orders dated 2.5.1990, 16.3.1990 & 5.10.1990
of the Allahabad High Court in W.P. No. 212/90, C.M.W.P. No. 7735/89
C.M.W.P. No. 15865/86 and C.M.W.P. No. nil of 1990.
B
Raja Ram Aggarwal, H.N. Salve, VJ. Francis, B.B. Singh, Gaurav
Jain, N.K. Goel, Ms. Abha Jain, Raju Ramachandran and Sunil Kr. Jain
for the Appellants.

--> B.S. Chauhan and Mrs. Rani Chh~bra for the Respondents.

The Judgment of the Court was delivered by I
c

"t- K. RAMASWAMY, J. Special leave granted.

These four cases have behind chequered history of the draft scheme
dated February 26, 1959 published under Sec. 68-C of the Motor Vehicles D
Act, 1939, for short 'the repealed Act' was kept hanging for 25 to 35 years.
The draft scheme dated 26th February, 1959 was published to nationalised
Saharanpur - Shahdara - Delhi route. The approved scheme published on
September 29, 1959 was quashed by the Allahabad High Court by judg-
ments dated October 31, 1961 and February 7, 1962 as against 50 operators E
and was upheld against other 50 operators. It was further held that the
}- State Govt. was at liberty to give fresh hearing to the 50 objectors on the
basis of the original proposal which was upheld by this court in Jeewan

- Nath Bahl & Ors. v. State of U.P., (C.A. No. 1616 of 1968 dated April 3,
1968), observing thus :

"The effect of the order passed by the High Court in the two
F

groups of \\Tit petitions was clearly that the scheme in its essence
..... ...
ill(_
was not affected, but it was directed that it was not liable to be
enforced against the 32 petitioners who applied to the High
Court in the first round of petitions and against 18 petitioners
G
in the second group of petitions. If that be the true effect of
the order there is in our judgment, a scheme in existence which
must have the statutmy operation contemplated by Section 68-F

- )- of the Motar Vehicles Act."

The record discloses that out of 50 operators some of them filed H
384 SUPREME COURT REPORTS (1992] 2 S.C.R.

A successive suits and obtined injuction from different courts scuttling the
hearing and kept pending for well over 25 years. Shri Chand and Others
filed Writ Petition No. 11744 of 1985, etc. in this court assailing that the
delay in approving the scheme amounts to abuse of process of law and
public interest thereby suffered. By judgment in Shri Chand, etc. v. Govt.
of U.P. & Ors., [1985] Suppl. 2 SCR 688, this court held that the delay of
B 26 years in disposing of the objections resulted in violation of Arts. 14 and
15(l)(g) of the Constitution. The draft scheme dated February 26, 1959 was
accordingly quashed. It directed the Govt. to frame the scheme afresh, if
necessary, Pursuant thereto the U.P. State Road Corporation Published
the draft scheme on February 13, 1986. While it was pending the motor
c Vehicles Act 59of1988, for short 'the Act' came into force with affect from
July 1, 1989. Bulandshahr to Delhi route was also nationalised in the
approved scheme published in the State Gazette dated September 27, 1956.

After the Act came into force, the respondents applied for and were
D granted permits for Saharanpur to Ghaziabad via Shahdara routes etc. The
appellants filed the writ petitions in the High Court of Allahabad at
Lucknow questioning the validity thereto which was dismissed by judgment
dated July 23, 1990. The draft scheme published in 1986 was held by the
hearing authority to have been lapsed by operation of Sec.100(4) of the
Act. In the Writ petition filed by the S.T. U. the High Court by its judgment
E dated March 16, 1990 held that the draft scheme stood lapsed within one
year from the date of the publication of the draft scheme and accordingly
upheld the order of the hearing authority against which the appeal (S.L.P.
No. 6300/91) wad filed. Special Leave petition Nos. 9701/90, 9702/90 and
2083/91 arise against the High Court's Judgment dismissing the writ peti-
F tions in which grant of permits under s. 80 of the Act on the Muzaffarnagar
- Chausana; Ghaziabad to Shahdara; Saharanpur to Ghaziabad covered
and partly overlapping nationalised routes were questioned. Thus these
appeals by special leave.

G In Jeevan Nath Bahl's case (C.A. No. 1616/68), this court held that
the scheme was not affected and the true effect of the orders passed by
the High Court in respect of 50 operators was deduced thus, "in our
judgment a scheme is in existence which must have the statutory operation
contemplated by Sec. 68-F of the Motor Vehicles Act ...... " It was further
held that the judgment of the High court "was only intended to prohibit
H the enforcement of the scheme against two groups of petitioners, who had
R.K VERMA v. STATE OF U.P. [RAMASWAMY, J.] 385
'•

approached the High Court challenging the validity of the orders sanction- A
ing the scheme". The result is that the scheme would operate as against
every other person other than the fifty operators and the S.T.U. has the
exclusive right to ply its vehicles on the notified route. 50 operators not
only continuted to ply there vehicles till expiry of their permits but
managed to ply till date.
B
In Mysore State Road Transport Corporation v. Mysore State Transport
Appellate Tribunal, [1975] 1 SCR 615, this court held thus :

"Any route or area either wholly or partly can be taken over by
a State Undertaking under any scheme published, approved C
and notified under the provisions of Ch. IV-A of the Act
inserted by Sec. 62 of Act 100 of 1956. If, therefore, tbe scheme
prohibits private transport owners to operate on the notified
area or route or any portion therefore, the Regional Transport
Authority cannot either renew the permit of such private
owners or give any fresh permit in respect of a route which D
overlaps the notified route. In considering the question whether
when one party has monopoly over a route, a licence can be
granted to any other party over any part of that route, the
distinction between "route" and "highway" is not at all relevant.
Where a private transport owner makes an application to E
operate on a route which overlaps even a portion of the notified
route, then that application has to be considered only in the
light of the scheme as notified. If any conditions are placed
then those conditions have to be fulfilled and if there is a total
prohibition then the application must be rejected. There is no
justification for holding that the integrity of the notified scheme F
is not affected if the overlapping is under five miles or because
a condition has been stipulated in the permit that the operation
will not pick up or set down any passangers on the overlapped
route."

In Adarsh Travels Bus Service v. State of U.P. & Ors., [1985} Suppl. 3
G
SCR 661, this court held thus :

"Where a route is nationalised under Chap. IV-A of the Act,
a private operator with a permit to ply a stage carriage permit
over another route but which has a common overlapping sector H
386 SUPREME COURT REPORTS [1992] 2 S.C.R.

A with the nationalised route cannot ply his vehicle over that part
of the overlapping common Sector, even if with corridor restric-
tions, that is, he docs not pick up or drop passengers on the
overlapping part of the route.

While the provisions of Chapter IV-A are devi~ed to override
B 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 to the "take over" of the operation of a
road transport service by the State Transport Undertaking in
relation to any area or route or portion thereof. While on the
c one hand, the paramount consideration is the public interest,
the interest of the existing operators are sufficiently well-taken A
care of and slight inconvenient inevitable are sought to be
reduced to a minimum.

A perusal of s. 68-C, s. 68-0(3) and S.68-FF in the light of the
D
definition of the expression 'route' in S.2(28A) appears to make
it manifestly clear that once a scheme is published under S.
68-D in relation to any area or route or portion thereof, whether
to the exclusion, complete or partial of other persons or other-
wise, no person other than the State Transport Undertaking
E may operate on the notified or national route except as
provided in the scheme itself. A necessary consequence of these
provisions is that no private operator can operate his vehicle
on any part or portion of a notified area or notified route unless
authorised so to do by the terms of the scheme itself. He may
F not operate on any part or portion of the notified route or area
on the mere ground that the permit as originally granted to him
covered the notified route or area. The private operator cannot
take the pka of inconvenience of the public. If indeed there is
any need for protecting the travelling public from incon-
venience the State Transport Undertaking and the Government
G w:ill make a sufficient provision in the scheme itself to avoid
inconvenience being caused to the travelling public."

The contention of Shri Harl,sh Salve, the learned Senior counsel for
contesting respondents, is that the scheme of nationalisation relates to "any
H area, route or portion thereof'. In Shri Chand's case this court quashed the
R.K. VERMA v. STATE OF U.P. [RAMASWAMY, J.] 387

draft scheme dated February 26, 1959 taking over the Saharanpur-Shah- A
dara-Delhi route. The fresh draft scheme dated February 13, 1986 to
nationalise Saharanpur-Shahdara-Delhi route stood lapsed by operation of
s. 100(4) read with s.217(2)(e) of the Act. Therefore, the; grant of permits
to the respondents is valid in law. In Shri Chand's case this court quashed
the draft scheme dated February 26, 1959 as it was an abuse of the process B
of law to keep draft scheme pending for well over 26 years creating
monopoly in favour of the 50 existing operators who compete with the state.
The review petition filed by the U.P. Govt. in Shri Chand's case was
rejected by this court. The result is that there is no scheme on Saharanpur
to Delhi route. The High Court thereby was justified in dismissing the '\\Tite
petitions. c
In H.C. Narayanappa & Ors. v. State of Mysore & Ors., [1960) 3 SCR
742 the Constitution Bench held that the scheme framed under s. 68-C of
the repealed Act is law within the meaning of Arts.13 and 19(6) of the
Constitution. It excludes the private operators from notified routes or D
areas. It immunes from the attack that it impinges the fundamental rights
guaranteed under Art. 19(1.)(g). It also could not be challenged as dis-
criminatory. In Nelznt Motor Transport Co-op. Society & Ors. v. State of
Rajasthan & Ors., [1964] 1 SCR 220, another Constituion Bench held that
the Act 4of1939 (repealed Act) does not provide for review of an approval
once given though it may be entitled to correct any clerical ffii.stakes or E
inadvartent slips that may have crept in the order. It was also held that
once a scheme was finally approved and published in the gazette, it is final
and the approval of the scheme was as a whole. Ill Jeevan Nath Bahl's case
a Bench of three Judges of this court held that the effect of the order
passed by the high Court in the first instanace was that the scheme in F
existence must have statutory operation contemplated by s.68-F of the
Motor Vl.".hicles Act and that the order of the High Court intended to
prohibit the enforcement of the scheme against two groups of the
petitioners in the Hi.gh Court, n~ely, .· then existing 50 operators who
challenged the scheme. It is seen that Bulandshahr to Delhi route was
nationalised by publication of the approved scheme in the gazette on G
October 6, 1956 and the approval of Saharanpur - Shahdara - Delhi route
on September 29, 1959 became final. Therefore, the routes or areas therein
stood nationalised to the complete exclusion of private operators except to
the extent under the scheme therein i.e. the 50 operators against whome it
was held not to be operative till their objections are heard and decided by H
388 SUPREME COURT REPORTS (1992] 2 S.C.R.

A the hearing authority.

In Mysore State Road Transport Corporation's case, this court per
majority held that where a part of the Highway to be used by private
Transport owners traverse on a line on the same highway on the notified
B route, then that application has to be considered only in the light of scheme
as notiofied. If any conditions are placed then those conditions have to be
fulfilled and if there is a total prohibition then the application must be
rejected. If there is a prohibition to operate on any notified route or routes,
no licence can be granted to any private operators, whose route traversed
or overlapped in part or whole of that notified route. The inter-section of
c the notified routes must amount to traverse or overlapping the routes
because the prohibition must apply to the whole or part of the route on
the highway on the same line or the route and inter-section cannot be said
to be traversing the same line. In S. Abdul Khader Saheb v. Mysore Revenue
-r--
Appellate Tribunal & Ors., [1973) 1 SCC 357, this court approved the view
D of the Karnataka High Court that, when once on a route or a protion of
the route there has been total exclusion of the operation of the stage
carraige services by operators other than the State Transport Undertaking,
by virtue of a clause in an approved scheme the authorities granting permit
under Chapter IV of the Motor Vehicles Act should refrain from granting
the permit contrary to the scheme. In Adarash Travels's case this court by
E a Constitution Bench held that there is a total prohibition of private
operators from plying the state carriages on the whole or part of the
notified routes, even though there is partial overlapping on the said route
or routes. The operation of the Road Transport Service by the State Road
Transport Undertaking in relation to that area or route or portion thereof
F is total and complete prohibition of the operation of the Road Transport
Service by private operators. The operation of the Road Transport Service
by the State Undertaking in relation to that area or route or a portion
thereof overrides the provisions of Chapter IV of the Repealed Act 4, 1939. ;
This court also rejected the contention of the operators that on the
G nationalised approved routes or overlapped route the private operator is
entitled to ply the stage carriages without picking up or setting down any
passengers on the common sector. This court also negatived as lacking
substance of the contention that complete exclusion of private operators
from common sector would be violative of Art. 14 and that it would be
ultra vires of s. 68-D. This court approved the majority view in· Mis State
H Road Transport Corporation's case and Abdul Khader Shaheb's case.
R.K. VERMA v. STATE OF U.P. [RAMASWAMY, J.] 389

- _)._ It is unfortunate that Jeevan Nath Bahl's case was not brought to the A
notice of the two Judges Bench when Shri Chand's case was decided.
Despite its being pointed out in the Review ·Petition, the same was dis-
missed. The question is what is the effect of the decision in Sri Chand's
case over Jeevan Nath Bahl's case. Consistent law laid down by this court
is that draft scheme under s. 68-C and approved under s.68-D of Chapter
B
IVA of the Repealed Act (Chapter VI of the Act), is a law and it has
overriding effect over Chapter IV of the repealed Act (Chapter V of the
Act). It operates against everyone unless it is modified. It excludes private
operators from the area or route or a portion thereof covered under the .
scheme except to the extent excluded under that scheme itself. The right
of private operators to apply for and to obtain permits under Chapter IV c
of the repealed Act (Chapter V of the Act) has been frozen and prohibited.
The result that emerges therefrom it that the nationalisation of Saharanpur
- Shahdara - Delhi route approved and published on September 29, 1959
became final and to that extent it cannot be said to have been quashed by
this court in Sri Chand's case. The approved scheme is law operating D
against everyone except 50 objectors/operators and the writ issued by this
court cannot ·have the effect of annuling the law. What was quashed and
issue of fresh draft scheme pursuant thereto, relate to only of original draft
scheme operative against 50 objectors/operators and no more. Even on
pfinciple, the decision of a Bench of two Judges cannot have the effect of
overruling the decision of a Bench of three Judges. The fresh draft scheme E
under s.68-C dated February 13, 1986 must, therefore, be construed to be
1 only in relation to 50 existing operators as per the directions ultimately
I

/
/ emerged in Jeevan Nath Bahl's case.
',.__.//
The next question is whether the draft scheme dated Feb. 13, 1986 F
stood lapsed under S. 100(4) of the Act. The High Court relied on its
earlier judgment and held that by operation of sub-sec. 4 of s.100 of the
Act the draft scheme stood lapsed from one year of the date of its
publication. In Krishan Kumar v. State of Rajasthan & Ors., [1991] 4 SCC
258 this court considered the effect of s.100(4) read with s.217(2)(e) of the G
Act and held that the rigour of one year period provided under s.100( 4)
would apply to the draft scheme published under s.100(1) of the Act and
it would not apply to the scheme framed under s.68-C and pending as on
the date of the commencement of the Act. On harmonious construction of
ss.217(2)(e) and 100(4) of the Act, the draft scheme published under s.68-C
of the Repealed Act would stand lapsed only if it is not approved.within 1:-1
390 SUPREME COURT REPORTS [1992] 2 S.C.R.

A one year from the date when the Act came into force i.e. with effect from
July 1, 1989 by which date it was pending before the hearing authority and
one year had not expired. The hearing authority, therefore, wrongly con-
cluded that the draft scheme stood lapsed. The High Court also equally
committed illegality following its earlier view which now stood overruled
by this court in Krishan Kumar's case. Accordingly it must be held that the
B view of the High Court and the hearing authority is clearly illegal.

The result of the above discussion will lead to the following con-
clusions:

c The nationalisation of Saharanpur - Shahdara - Delhi route by pub-
lication of the approved scheme on September 29, 1959 is operating to the
total exclusion of every private operator except U.P. State Road Transport
Corporation and 50 operators including the appellants herein whose ob-
jectjons were upheld by the High Court in the first instance and merged
in the judgment of this court in Jeevan Nath Ba/ti's case. Equally of
D
Bulandshar to Delhi route. Under s. 80 of the Act no private operator has
right to apply for and obtain permits to piy the stage carriages on the
approved or notified route/routes or areas or portion thereof. The grant of
permit to all the respondents 7 to 285 private operators in C.A. 1198/92
(S.L.P. No.9701/90) or any others under s.80 of the Act on the respective
E routes or part, or portion thereof to provide transport service is clearly
illegal and without jurisdictio11.

It is true as contended by Shri Salve that in Mithilesh Garg & Ors. v.
Union of India & Ors., (1992] i SCC 168, this court held that the liberal
F policy of grant of permits under s.80 of the Act is directed to eliminate
corruption and favouritism in- the process of granting rermits, eliminate
.monopoly of few persons and making operation on a particular route
economically viable and encourage healthy competition to bring about
efficiency in the trade. But the free ply is confined to grant of permits under
G Chapter V of the Act. By operation of s.98 of the Act, Chapter VI overrides
Chapter V and other law and shall have effect i;iotwithstanding anything
inconsistent therewith contained in Cha.pter V or any other law for the time
being in force or any instrument having effect by virtue of such law. The

H
result is that even under the Act the existing scheme under the repealed
Act or made under Chapter VI of the Act. shall have over-riding effect on
Chapter V notwithstanding any right given to private operators in Chapter
-
R.K. VERMA v. STATE OF U.P. [RAMASWAMY, J.] 391

~---- V of the Act. No corridor protection to private operators is permissible. A
>
Accordingly we .hold that the approved scheme dated September 29,
1959 on Saharanpur - Shahdara - Delhi route shall continue to be valid
scheme under the Act. The U.P. State Road Transport Corporation alone
shall have the exclusive right to ply their stage carriages on the said route B
and Bulandshahr - Delhi route/areas or portions thereof. By operation of
the orders passed by the Allahabad High Court which merged in Jeevan
Nath Bahl's case, protection was given-oniy to 50 privat_e operators includ-
ing the appellants herein to be heard of their objections. The fres~ draft
scheme dated February 13, 1986 had not been lapsed and would continue
----- >- to be in operation. It would be confined only to 50 operators. c

-- -~ The 50 operators including the appellants/private operators have
been running their stage carriages by blatant abuse of the process of the
court by delaying the hearing as directed in Jeevan Nath Bahl's case and D
the High Court earlier thereto. As a fact, on the expiry of the initial period
of grant after Sept. 29, 1959 they lost the right to obtain renewal or to ply
their vehicles, as this court declared the scheme to be operative. However,
by sheer abuse of the process of law they are continuing to ply their vehicles
pending hearing of the objections. This Court in Grindlays Bank Ltd. v.
Income-tax Officer& Ors., (1990] 2 SCC 191, held that the High Court while E
exercising its power under Art. 226 the interest of justice requires that any
undeserved or unfair advantage gained by a party invoking the jurisdiction
of the court must be neutralised. It was further held that the institution of
the litigation by it should not be permitted to confer an unfair advantage
on the party responsible for it. In the light of that law and in view of the F
power under Art. 142(1) of the Constitution this court, while exercising its
jurisdiction would do complete justice and neutralise the unfair advantage

,_ \ gained by the 50 operators including the appellants in dragging the litiga-
tion to run the stage carriages on the approved route or area or portion
thereof and forfeited their right to hearing of the objections filed by them
to the draft scheme dated Feb. 26, 1959. Moreover, since this court in G
Jeevan Nath Bahl's case upheld the approved scheme and held to be
operative, the hearing of their objections would be a procedural formality
... )- with no tangible result. Therefore, the objections outlived their purpose .
ihe~ are, therefore, not entitled to any hearing before the hearing
authority. H
392 SUPREME COURT REPORTS [1992) 2 S.C.R.

A The appeals are accordingly allowed. The grant of perm.its to ail the
respondents/private operators and respondents Nos.7 to 285 in C.A. No.
1198/92 (S.L.P. No. 9701/90) under s.80 of the Act or any others on the
respective routes, parts or portions of the nationalised routes on Feb. 13,
·=
1986 draft scheme are quashed. The hearing authority shall lodge the
objections of the 50 operators including the appellants herein. The com-
B petent authority shall approve the draft scheme of 1986 within a period of
30 days from the date of receipt of the judgment; and publish the approved
scheme in the gazette. The permits granted to the 50 operators or any other
shall stand cancelled from that date, if not having expired in the meanwhile.
No permits shall be renewed. Appropriate action should be taken by
c respondents 3 to 4 in CA No. 1198/92 (S.L.P. No. 9701/90) to see that all
the permits granted to the 50 operators including the appellants are seized
and cancelled. The U.P. State Transport Corporation shall obtain required
additional permits, if need be, and put the stage carriages on the routes to
provide transport service to the travelling public immediately on publica-
D tion of the approved draft scheme in the State Gazette. The Appeal arising
out of S.L.P. No. 2083/91 is allowed with costs throughout against respon-
dents Nos.4 to 13. The appeals arising out of S.L.P. Nos.6300/91, 9701/90
and 9702/90 are allowed without costs.

N.V.K. Appeals allowed.