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R. Raghuram v. ( 3 In The Appeal)
Factual and Procedural Background
The petition seeks review of this Court’s decision dated 24 January 1989 in Civil Appeal No. 4126 of 1988. The earlier judgment had permitted the appellant, an existing private stage-carriage operator, to increase the number of trips on the Chittoor–Iruvaram Cross–Kannikapuram sector because the Court believed only a draft scheme under Section 68-C of the Motor Vehicles Act, 1939 was in force. After that judgment, it was brought to the Court’s notice that an approved scheme already covered a major portion of the same route, rendering the earlier assumption incorrect. A review petition was therefore filed to reconsider whether any variation permitting additional trips could stand in the face of the approved scheme.
Legal Issues Presented
- Whether, after publication of an approved scheme under Chapter IV-A of the Motor Vehicles Act, 1939, an existing permit holder can obtain variation of his permit so as to increase the number of trips on a notified route or its overlapping sector.
- Whether the earlier two-judge decision in Karnataka State Road Transport Corporation v. B.A. Jayaram (1984 Supp SCC 244) remains good law in view of the Constitution Bench ruling in Adarsh Travels Bus Service v. State of U.P. (1985 4 SCC 557).
- Whether an inter-State agreement under Section 63 of the Act can override the restrictions contained in an approved scheme framed under Chapter IV-A.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Adarsh Travels Bus Service v. State of U.P. (1985) 4 SCC 557; AIR 1986 SC 319 (Constitution Bench) |
A private operator whose route overlaps a nationalised route cannot ply, even with corridor restrictions, unless the scheme itself grants such an exemption. Any increase in trips on the overlapping sector amounts to the grant of a new permit. | The Court relied on this ruling to conclude that increasing trips on the notified Chittoor–Kannikapuram sector would violate the approved scheme. It treated this authority as overruling any contrary view. |
| Karnataka State Road Transport Corporation v. B.A. Jayaram 1984 Supp SCC 244; AIR 1984 SC 790 |
Held that variation of conditions under Section 57(8) does not necessarily constitute grant of a new permit. | The Court declared this interpretation erroneous and deemed it overruled by Adarsh Travels, emphasising that an increase in trips effectively amounts to a fresh permit that the scheme forbids. |
Court's Reasoning and Analysis
1. The Court first noted the factual error in its earlier judgment: an approved scheme, not merely a draft, governed the disputed route. Under that scheme, existing operators were allowed to continue only with the number of trips they operated on the date of publication.
2. Citing the Constitution Bench decision in Adarsh Travels, the Court reasoned that permitting additional trips would be equivalent to issuing a new permit on the notified route, directly contravening the scheme’s exclusivity in favour of the State Transport Undertaking.
3. The Court expressly disagreed with the two-judge decision in KSRTC v. B.A. Jayaram, stating that its view—that variation is not a new permit—cannot survive in light of the broader principles laid down in Adarsh Travels.
4. Addressing Section 63 inter-State agreements, the Court observed that Chapter IV-A has overriding effect by virtue of Section 68-B; therefore, no inter-State arrangement can justify additional trips contrary to the approved scheme.
5. On these premises, the Court concluded that its 24 January 1989 decision warranted review.
Holding and Implications
ORDER: The earlier decision dated 24 January 1989 is directed to be reviewed, and the matter is referred to a Constitution Bench to decide whether an existing operator’s trips can be increased after an approved scheme is published.
Implications: The operative effect of the 1989 judgment is stayed pending constitutional bench determination. The reference signals potential clarification on the status of existing operators’ rights under nationalisation schemes and the continued vitality of conflicting precedents. No final relief is granted to the parties until the Constitution Bench renders its decision.
E.S Venkataramiah, C.J— This is a petition for review of the decision dated January 24, 1989 rendered in Civil Appeal No. 4126 of 1988. The question involved in this case relates to the right of a private operator to ply a stage carriage on a notified route under Chapter IV-A of the Motor Vehicles Act, 1939 (hereinafter referred to as ‘the Act’) or any part thereof. Although the case proceeded on the basis that there was only a draft scheme published under Section 68-C of the Act it now transpires that there was an approved scheme in respect of major portion of the route in question. It is not disputed that between Chittoor and ∼Kannikapuram the portion of the route Chittoor-Iruvaram Cross-Kannikapuram is a notified portion of the route. Under the scheme the holders of stage carriage permits operating on portions of the proposed route were not to be affected. Even while the draft scheme was pending the appellant P. Jayarama Naidu who was an existing permit holder applied for a variation of his permit as he desired an increase in the number of trips operated by him on a portion of the notified route. The State Transport Authority allowed an increase in the number of trips but on appeal the State Transport Appellate Tribunal reversed the order and refused the increase. A writ petition was filed in the High Court and the same was dismissed on the ground that no variation in the conditions of the existing permit could be allowed in view of the draft scheme but this Court by its judgment dated January 24, 1989 allowed the appeal on the ground that the draft scheme had not yet been finalised and that there could be no objection to the variation of the permit until there was an approved scheme.
2. A review petition was filed bringing to the notice of the court that there was an approved scheme already and the appellant could not be permitted to operate on the portion of the notified route between Chittoor-Kannikapuram.
3. In Adarsh Travels Bus Service v. State of U.P (1985) 4 SCC 557, AIR 1986 SC 319 a Constitution Bench of this Court has held that where a route is nationalised under Chapter IV-A of the Act, a private operator with a permit to ply a stage permit over another route but which has a common overlapping sector with the nationalised route, cannot ply his vehicle over that part of the overlapping common sector, even with corridor restrictions, such as that he would not be able to pick up or drop passengers on the overlapping part of the route unless such an exemption had been allowed in the scheme itself. Even when the scheme provides that an existing operator is exempted from the operation of the scheme it only means that he can continue to operate his services with the existing number of trips on the date on which the scheme is published and it does not authorise him to apply for a variation of his permit so that he can increase the number of trips on the overlapping portion of the notified route thus increasing the burden of private operation of vehicles on the notified route in question. The variation authorising increasing the number of trips in fact amounts to granting of a fresh permit to run one more stage carriage service doing one round trip on the notified route and that would be in violation of the scheme itself because the scheme protects only the number of trips which were being operated at the time of its publication.
4. Our attention is, however, drawn to another decision of this Court in Karnataka State Road Transport Corporation v. B.A Jayaram 1984 Supp SCC 244, AIR 1984 SC 790 in which it has been held by a bench consisting of two learned Judges that Section 57(8) does not create a legal fiction and grant of an application for variation in the conditions of one existing permit in respect of matters set out in Section 57(8) does not result in the grant of new permit in every case. With great respect to the learned Judges who decided the said case we feel that the said opinion is erroneous because the increase in the number of trips of vehicles which were being run under the existing permit does amount to grant of a new permit to operate one more stage carriage. Such a thing could not be permitted particularly in view of the decision in Adarsh Travels case (1985) 4 SCC 557, AIR 1986 SC 319. The construction on the statute placed by the decision of this Court in Karnataka State Road Transport Corporation case 1984 Supp SCC 244, AIR 1984 SC 790 referred to above must be deemed to have been overruled in Adarsh Travels case (1985) 4 SCC 557, AIR 1986 SC 319. The prejudice to the finances that is caused to the State Transport Undertaking for whose benefit the scheme is made is not so much by the number of vehicles used but by the number of trips that are operated on the notified route in question. The economy and coordination, two of the factors governing a scheme would also be affected. On the basis of the above view, another Division Bench has disposed of another petition at the stage of admission.
5. Even if there is an inter-State agreement under Section 63 of the Act for increasing the number of trips, such an agreement cannot override the provisions of Chapter IV-A by virtue of Section 68-B of the Act. Section 63 being in Chapter IV of the Act the scheme approved under Chapter IV-A prevails over it.
6. We therefore feel that the order dated January 24, 1989 in Civil Appeal No. 4126 of 1986 has got to be reviewed in view of the fact that there was an approved scheme in force which did not authorise the increase in the number of trips of the vehicles belonging to the existing operators on the date of the scheme.
7. In view of the above we feel that this review petition should be referred to a Constitution Bench to decide whether on the publication of an approved scheme the number of trips of the 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. We, therefore, refer this case to a Constitution Bench. Since the matter is urgent and requires to be decided early it may be posted before the Constitution Bench for final hearing on the first Tuesday of February 1990 subject to overnight part heard case.
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