G.T. Venkataswamy Reddy v. State Transport Authority And Others

F.M. Ibrahim Kalifulla, J.— This reference to this Constitution Bench was made by a Division Bench of this Court in their order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361 made in R. Raghuram v. P. Jayarama Naidu 1990 Supp SCC 361, which reference though was initially made to a three-Judge Bench, was subsequently referred to the Constitution Bench by the three-Judge Bench led by the Hon'ble the Chief Justice of India vide order dated 1-12-2004 Civil Appeal No. 4480 of 1998, IA No. 3 in CA No. 5470 of 1998. As the issues raised and argued before us were common, on the question referred, we heard the arguments in common.

2. We heard the arguments of Mr K.K. Venugopal, learned Senior Counsel for the appellant in CA No. 3606 of 2003, Ms Kiran Suri, learned Senior Counsel for the appellant in CA No. 4480 of 1998, Mr A. Mariarputham, learned Senior Counsel for the appellant in CAs Nos. 7195-97 of 2001, Mr Amit Singh Chaddha, learned Senior Counsel for the appellant in CA No. 3853 of 2003 and Mr Raju Ramachandran, learned Senior Counsel for the respondent(s) in CA No. 4480 of 1998.

3. Mr K.K. Venugopal, learned Senior Counsel made his leading submissions, followed by Ms Suri and Mr Chaddha as well as Mr Mariarputham, learned Senior Counsel for the appellants, while Mr Raju Ramachandran, learned Senior Counsel addressed the arguments on behalf of the respondents in these appeals.

4. Mr K.K. Venugopal, learned Senior Counsel for the appellant in CA No. 3606 of 2003 made a brief reference to the order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361, by which the present reference came to be made to the Constitution Bench and the subsequent order dated 1-12-2004 Civil Appeal No. 4480 of 1998, IA No. 3 in CA No. 5470 of 1998 as well. The learned Senior Counsel in his submissions, fairly pointed out that the issue concerned in this reference has to be considered by referring to the decisions reported in Karnataka SRTC v. B.A. Jayaram 1984 Supp SCC 244 (hereinafter referred to as “Jayaram”), Pandiyan Roadways Corpn. Ltd. v. M.A. Egappan (1987) 2 SCC 47 (hereinafter referred to as “Egappan”), Adarsh Travels Bus Service v. State of U.P. (1985) 4 SCC 557 (hereinafter referred to as “Adarsh Travels”), Karnataka SRTC v. Karnataka State Transport Authority 1987 Supp SCC 648 (hereinafter referred to as “Ksrtc”) and R. Raghuram 1990 Supp SCC 361 (hereinafter referred to as “Raghuram”).

5. The learned Senior Counsel made a detailed reference to the list of dates commencing from 1963-1964 when the initial permit in the case of appellant in CA No. 3606 of 2003 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 was originally granted in favour of one Mr C. Rajasekaran and subsequently transferred to Smt G. Kavitha Gopinath on 12-3-1998 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 10-1-1985 to the State Transport Authority (STA), Bangalore for grant of four additional singles and one additional vehicle by the order dated 10-1-1985, 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 STAT, Madras as well as that of the order of the learned Single Judge in CRP No. 553 of 1988 and the order of the Division Bench in WAs Nos. 750 and 780 of 2002 dated 23-3-2002 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 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 68-A, 68-B, 68-FF falling under Chapter IV-A of the Act while making his submissions.

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 1984 Supp SCC 244” and “Egappan (1987) 2 SCC 47” since the existing permit in “Jayaram 1984 Supp SCC 244” was an exempted one on the nationalised route and variation of that permit by added singles and additional bus was an issue, while in “Egappan (1987) 2 SCC 47”, the operator was not one of the persons exempted under the Nationalised Scheme and on the other hand he was operating on a non-scheme route. The learned Senior Counsel then contended that “Adarsh Travels (1985) 4 SCC 557” 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 to whether an operator on that route could operate with corridor restrictions.

8. The learned Senior Counsel submitted that the ratio in “Adarsh Travels (1985) 4 SCC 557” 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.

9. As far as the case in “Raghuram 1990 Supp SCC 361” is concerned, the learned Senior Counsel submitted that the said case was not 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.

10. Lastly, the learned Senior Counsel contended that the judgment in “Jayaram 1984 Supp SCC 244”, “Raghuram 1990 Supp SCC 361” and “Ksrtc 1987 Supp SCC 648” support the case of the appellant, which concerns grant of variation on a nationalised route, that the appellant was operating from 1965 and the variation was granted in 1985 and, therefore, his operation should not be disturbed in public interest.

11. Ms Suri, learned Senior Counsel for the appellant in CA No. 4480 of 1998, after referring to the list of dates rightly formulated 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 inter-State permit variation?

12. The learned Senior Counsel after making reference to “Egappan (1987) 2 SCC 47” judgment, submitted that the appellant's permit was covered by a draft scheme. As regards the alleged conflict between “Jayaram 1984 Supp SCC 244” and “Egappan (1987) 2 SCC 47”, the learned Senior Counsel submitted that since the scheme was at the draft stage, the position was different. As far as the implication of Section 68-FF 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.

13. Mr Mariarputham, learned Senior Counsel for the appellant in CAs Nos. 7195-97 of 2001, submitted that the question as regards the 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.

14. Mr Chaddha, learned Senior Counsel for the appellant in CA No. 3853 of 2003 after making reference to the scheme concerning the case of the appellant in that case, submitted that the said scheme does not cover the case, inasmuch as the argument is that any inter-State 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, the learned Senior Counsel sought to distinguish the case of the appellant.

15. As against the above submissions, Mr Raju Ramachandran, learned Senior Counsel for the respondent in CA No. 4480 of 1998 submitted that Section 68-B of the Act is the complete answer to the argument of the learned counsel for the appellant in CA No. 3853 of 2003. The learned Senior Counsel further submitted that having regard to the implication of 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.

16. Having heard the learned Senior Counsel for the appellants and the learned Senior Counsel for the respondent, we proceed to answer the reference as under.

17. By order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361, the Division Bench of this Court after noting the reference made in R. Raghuram 1990 Supp SCC 361 to a Constitution Bench and on finding that later the matter was referred 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 order dated 1-12-2004 Civil Appeal No. 4480 of 1998, IA No. 3 in CA No. 5470 of 1998, the said Bench again referred the case back for hearing before a Constitution Bench. That is how these appeals are listed before us.

18. When we refer to the order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361, we find an apparent conflict in the view of the law taken in “Jayaram 1984 Supp SCC 244” and “Egappan (1987) 2 SCC 47”. It was also noted therein that the Constitution Bench decision in “Adarsh Travels (1985) 4 SCC 557”, wherein, similar question came to be considered and decided was distinguished by a three-Judge Bench of this Court in “Ksrtc 1987 Supp SCC 648”. The case which got abated was reported in “Raghuram 1990 Supp SCC 361”. When we read the order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361, which is 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 1-12-2004 Civil Appeal No. 4480 of 1998, IA No. 3 in CA No. 5470 of 1998, except making a reference to the apparent conflict as between “Jayaram 1984 Supp SCC 244” and “Egappan (1987) 2 SCC 47” as well as the distinction in “Adarsh Travels (1985) 4 SCC 557” made in “Ksrtc 1987 Supp SCC 648”, there was no specific terms of reference made in either of the two orders. However, when we refer to the case which got abated viz. “Raghuram 1990 Supp SCC 361”, while dealing with an identical issue, this Court 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: (Raghuram case 1990 Supp SCC 361)

“7. … 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 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.

19. It is worthy to note that before formulating the said question for reference to a Constitution Bench, the learned Judges culled out the ratio decidendi in the Constitution Bench decision of “Adarsh Travels (1985) 4 SCC 557” and how the case in “Jayaram 1984 Supp SCC 244” runs counter to the said ratio and consequently, it was held that the ruling in “Jayaram 1984 Supp SCC 244” was impliedly overruled in “Adarsh Travels (1985) 4 SCC 557”.

20. Keeping the said perception which weighed with this Court in “Raghuram 1990 Supp SCC 361” 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 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361 and 1-12-2004 Civil Appeal No. 4480 of 1998, IA No. 3 in CA No. 5470 of 1998 were on all fours covered by the reference made in “Raghuram 1990 Supp SCC 361” to the Constitution Bench. Therefore, though the said reference stood abated because of the demise of the appellant therein, the question of law referred to the Constitution Bench rightly survived and the said question requires to be answered in this reference.

21. In order to answer the abovereferred question, we have to make note of the principles which were noted in the judgments in “Jayaram 1984 Supp SCC 244”, “Adarsh Travels (1985) 4 SCC 557”, “Egappan (1987) 2 SCC 47”, “Ksrtc 1987 Supp SCC 648” and “Raghuram 1990 Supp SCC 361”, apart from the relevant provisions falling under Chapters IV and IV-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 analyse the question for consideration and render our decision.

22. 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 intricate 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 question referred before us. With that prelude, we proceed to first analyse the decisions mentioned above.

23. “Jayaram 1984 Supp SCC 244” is the starting 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 “Jayaram 1984 Supp SCC 244” has been formulated in para 9 which reads as under:

“9. On the above rival contentions, two main questions arise for our consideration, namely,

(1) Whether sub-section (8) of Section 57 creates a legal 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 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?”

24. Before answering the above questions the learned Judges made a detailed reference to the various provisions contained in Chapters 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 para 15: (Jayaram case 1984 Supp SCC 244)

“15. … If the effect of sub-section (8) of Section 57 were as contended for by the appellant, that is, if 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 sub-section 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 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 law. Considerable emphasis were placed on behalf of the appellant on the words “shall be treated 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 sub-section (8) of Section 57 was by a fiction of law put on the same footing as an application for the grant of a new permit and it, therefore, followed as a corollary that such an application if granted would result in the grant of a new permit.”

25. Thereafter, the learned Judges referred to sub-sections (1) to (10) of Section 57 of the Act in detail and then stated as under in para 16: (Jayaram case 1984 Supp SCC 244)

“16. … Sub-section (8) comes immediately after 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 sub-section was to prescribe the procedure to be followed when an application for variation of the conditions of 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 carrier's permit. It is for the purpose of providing that the procedure to be followed in the case of an application made under sub-section (8) is to be the same as the procedure to be followed in the case of an application for a new permit that sub-section (8) 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 (7). This is a very different thing from enacting a legal fiction.”

(emphasis supplied)

26. While stating the law as above, the learned Judges sought reliance upon the decision in Shiv Chand Amolak Chand v. Regional Transport Authority (1983) 4 SCC 433 wherein 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 para 17: (Jayaram case 1984 Supp SCC 244)

“17. … Assuming, therefore, that an application for variation of the conditions of a permit referred to in sub-section (8) of Section 57 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 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 application for variation the procedure prescribed by sub-sections (3) to (7) of Section 57 and not for the purpose of providing that when the application for variation is granted, the permit so varied would be deemed to be a new permit.”

(emphasis supplied)

27. Having thus answered the first question by holding that 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 para 18: (Jayaram case 1984 Supp SCC 244)

“18. Even though when the condition of a permit is allowed to be varied on an application made under sub-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 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 permits of the existing permit-holders have been rendered ineffective. Further, 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 portion more than once cannot in any manner affect the services operated by the appellant on such portions since no passengers are allowed to be picked up or set down on such portions. All that would happen is that these vehicles, in the course of their inter-State operation would traverse these portions of the notified routes without in any way operating as stage carriages for such portions.”

28. 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 reference to the provisions contained in Chapter IV-A was made in the said decision, before reaching the ultimate conclusion in para 18, 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 68-FF 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 view expressed in “Jayaram 1984 Supp SCC 244” can be approved or disapproved.

29. With that we come to the Constitution Bench decision in “Adarsh Travels (1985) 4 SCC 557”, wherein the question posed for consideration is noted as under in the very first paragraph which is to the following effect:

“1. … The question for our consideration is, where a route 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 drop passengers on the overlapping part of the route? The answer to the question really turns on the terms of the scheme rather than on the provisions of the statute, as we shall presently show.”

30. The Constitution Bench in “Adarsh Travels (1985) 4 SCC 557” while dealing with the said question, made a detailed reference to the provisions contained in Chapter IV-A and while making reference to Section 68-C of the Act, observed as under in para 5: (Adarsh Travels case (1985) 4 SCC 557)

“5. … The policy of the legislature is clear from Section 68-C 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. 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 may be prescribed.”

31. Thereafter in para 6 it was held as under: (Adarsh Travels case (1985) 4 SCC 557)

“6. It is thus seen that while the provisions of 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 “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 one hand, the paramount 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 supplied)

32. A further reference can be made to the emphasis made by the Constitution Bench on the implication of Section 68-C, Section 68-D(3) and Section 68-FF of the Act in the light of the definition of the expression “route” in Section 2(28-A) of the Act in para 7. It will be useful to refer to the said part of the judgment in “Adarsh Travels (1985) 4 SCC 557” which is to the following effect: (Adarsh Travels case (1985) 4 SCC 557)

“7. A careful and diligent perusal of Section 68-C, Section 68-D(3) and Section 68-FF in the light of the definition of the expression “route” in Section 2(28-A) appears to make it manifestly clear that once a scheme is published under Section 68-D in relation to any area or route or portion thereof, whether to the exclusion, complete or partial 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 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 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 question is one of weighing in the balance the advantages 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 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 times permits for plying stage carriages from a point a short distance beyond one 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 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 supplied)

33. The Constitution Bench ultimately answered the question posed by it by holding as under in para 8: (Adarsh Travels case (1985) 4 SCC 557)

“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 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 stage carriage between those two points. The argument 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.”

34. With that we shall now refer to the so-called conflicting judgment viz. “Egappan (1987) 2 SCC 47”. The facts in the said case are noted in para 2, which requires to be noted and the same is extracted as under:

“2. The facts of the case are these. On 30-6-1976, as stated earlier, the approved scheme was published under Section 68-D of the Act in the Tamil Nadu Government Gazette in respect 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 completely all other persons from operating their stage carriage services under permits covering the entire route, referred to above except those persons mentioned in Annexure II to the said scheme without prejudice to any future modifications, variations, etc. of their permits. The operators whose names had been mentioned in Annexure II to the scheme were persons who were existing operators on the different sectors of the notified route on the date of the publication of the scheme. The respondent was not one of 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 mentioned in Annexure II to the scheme. He was 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 28-2-1981 he was able to secure the variation of the said permit from the Regional Transport Authority which enabled him to operate on the route measuring 21.4 km 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 23-12-1982 he obtained from the Regional Transport Authority a second variation of his permit under which he was authorised to operate his stage carriage service over a distance of 16.6 km from Checkanurani to Madurai which was also a part of the notified route. An appeal filed against that order was dismissed by the State Transport Appellate Tribunal. 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 1985 SCC OnLine Mad 236, (1986) 99 LW 18 the revision petition. This appeal by special leave is filed against the above order of the High Court.”

(emphasis supplied)

35. Thereafter, while dealing with the provisions contained in Chapter IV-A, it was held as under in para 4: (Egappan case (1987) 2 SCC 47)

“4. … In the context in which Section 68-F(1-D) appears we find it difficult to agree that the application 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 mischief of Section 68-F(1-D) of the Act. There is no justification to limit the application of Section 68-F(1-D) of the Act to only applications for fresh permits 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 whose variation he is seeking by the inclusion of a route or a part thereof in respect of which a scheme is published under Section 68-C of the Act ought not to make any difference. The principle underlying Section 68-F(1-D) of the Act is that the number of services on such a route should be frozen on the publication of a scheme under Section 68-C of the Act. It is not, however, necessary for us to pursue the applicability of Section 68-F(1-D) of the Act in 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 under Section 68-D of the Act on 30-6-1976 to which we have already adverted. The approved scheme, as mentioned earlier, excludes the operation by others of stage carriage services on the abovementioned route Madurai to Kumuli except those whose names are 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 of the Act. The effect of these provisions has been summarised by a Constitution Bench of this Court in Adarsh Travels Bus Service v. State of U.P. (1985) 4 SCC 557 Chinnappa Reddy, J. speaking for the Constitution Bench observed at p. 566 thus.…”

(emphasis supplied)

36. 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 68-C of the Act. It is also worthwhile to note that the word of caution expressed in “Adarsh Travels (1985) 4 SCC 557” in para 7 of that judgment has been found to have been abused in “Egappan (1987) 2 SCC 47” by getting two variations by a non-scheme operator successfully and was able to operate without any hindrance.

37. The last of the decision which requires to be noted in the present context is the one reported in “Ksrtc 1987 Supp SCC 648”. That was also a case where the route was covered by an approved scheme under Chapter IV-A of the Act. The respondent 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 application filed under Section 57(8) of the Act. The High Court declined to interfere and this Court after referring to the abovereferred two judgments merely stated that the law laid down in “Adarsh Travels (1985) 4 SCC 557” does not apply to the facts of that case and without any discussion much less detailed discussion, dismissed the appeal.

38. 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. Sections 68-B, 68-C, 68-D, 68-E, 68-F(1-D) and 68-FF of the Act, which are as under:

“57. (8) An application to vary the conditions of any 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 permit or a public carrier's 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 any area to increase the frequency of the service so provided, without any increase in the number of vehicles.”

“68-B. Chapter IV-A to override 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 law for the time being in force or in any instrument having effect by virtue of any such law.

68-C. 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, economical and properly coordinated 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 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 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.

68-D. Objection to the scheme.—(1) On the publication 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 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

(iii) any local authority or police authority within whose jurisdiction 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.

(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.

(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:

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.

68-E. Cancellation or modification of scheme.—(1) Any scheme published under sub-section (3) of Section 68-D may at any time be cancelled or modified by the State Transport Undertaking and the procedure laid down in Section 68-C and Section 68-D shall, so far as it can be made applicable, be followed in every case where the scheme is proposed to be cancelled or modified as if the proposal were a separate scheme:

Provided that the State Transport Undertaking may, with the previous approval of the State Government, modify without following the procedure laid down in Section 68-C and Section 68-D, any such scheme relating to any 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 respect of the following matters, namely—

(a) increase in the number of vehicles or the number of trips;

(b) change in the type of vehicles without reducing the seating capacity;

(c) extension of the route or area, without reducing the frequency of the service; or

(d) alteration of the timetable without reducing the frequency of the service.

(2) Notwithstanding anything contained in sub-section (1), the State Government may, at any time, if it considers necessary in the public interest so to do, modify any scheme published under sub-section (3) of Section 68-D, after giving—

(i) the State Transport Undertaking, and

(ii) any other person who, in the opinion of the State Government, is likely to be affected by the proposed modification,

an opportunity of being heard in respect of the proposed modification.”

“68-F. (1-D) Save as otherwise provided in sub-section (1-A) or sub-section (1-C), no permit shall, be granted or renewed during the period intervening between the date of publication, under Section 68-C of any scheme and the date of publication of the approved or modified scheme, in favour of any person for any class of road 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 68-C expires after 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 68-D.

***

68-FF. 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 68-D in respect of any notified area or notified route, the State Transport Authority or the Regional Transport Authority, 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 pursuance of an approved scheme, the State Transport Authority or the Regional Transport Authority, as the case may be, may grant temporary permits to any person in respect of such notified area or notified route subject to the condition that such permit shall cease to be effective on the issue of a permit to the State Transport Undertaking in respect of that area or route.”

39. At this juncture, it is necessary to state that in the decision in “Jayaram 1984 Supp SCC 244” and “Adarsh Travels (1985) 4 SCC 557”, 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 abovereferred to decisions can be noted and followed without making 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.

39.1. 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 number of vehicles 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 caption of Section 57 of the Act, one may tend to think that it is merely a procedure when anyone applies for grant of permit, which includes stage carriage permit. But, when we make a close reading of sub-sections (1) to (7), we can presently demonstrate how such provisions mandates compliance with 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). 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 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 filing of the application should be mandatorily made by giving not less than six weeks time-gap from the desired date of the applicant for the varied condition to take effect.

39.2. Under sub-section (3), once the Regional Transport Authority receives an application for variation of a 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 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 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.

39.3. When we refer to sub-section (4), here again we find that the 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.

39.4. 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 authorised representative. We are not concerned with sub-section (6), which pertains to contract carriage permits.

39.5. Under sub-section (7), in the event of the Regional Transport Authority rejecting an application for variation, it should give reasons in writing for such rejection.

40. 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 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-compliance with 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. 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-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 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.

41. The requirement of giving a public hearing coupled with requirement of personal hearing to the applicant as well as the person making the representation is yet another prescription which again shows that very serious consideration should be given to the application for variation inasmuch 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 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 variation. But, it will open up the scope for every member of the 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 passes an order in the application for variation by giving adequate reasons for grant or otherwise of such application 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 result in lack of coordination.

42. Having thus analysed the entire Section 57 of the Act barring 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 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.

43. Therefore, we are not in a position to approve of the conclusion in “Jayaram 1984 Supp SCC 244” to the effect that the application for variation in spite of 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 “Jayaram 1984 Supp SCC 244”. We also state that the contra opinion expressed in “Raghuram 1990 Supp SCC 361” will hold good.

44. With that when we come to the other sections with which we want to make an analysis, in the foremost, reference to Section 68-B 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 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. Insofar as, Section 57(8) of the Act is concerned, as has been noted by us and the manner in which we interpret it, we can safely hold that there will be no inconsistency with any of the provisions 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. Sections 68-A to 68-I of the Act.

45. Keeping the said broad statutory prescription vis-à-vis Section 57 of the Act, when we proceed to analyse Section 68-C 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 properly coordinated road transport service with the paramount consideration of public interest and such scheme should be prepared and published. Section 68-C of the Act, therefore, at the very inception of the formulation of a scheme by a State Transport Undertaking, should have the basic consideration of efficient, adequate, economical and properly coordinated transport service in public interest. Once such a scheme is formulated with the above avowed objects in mind and is notified, under Section 68-D, 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 provision of road transport facilities recognised 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.

46. Under sub-section (2) of Section 68-D of the Act, the State Government after considering the objections 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 scheme. Under Section 68-E 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 prescribed under Sections 68-C and 68-D 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 Sections 68-C and 68-D of the Act under the proviso to Section 68-E. That apart under sub-section (2) of Section 68-E of the Act, the State Government is fully empowered to modify any scheme published under sub-section (3) of Section 68-D 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 68-F of the Act, the State Transport Undertakings can be issued with the required permits.

47. Section 68-FF of the Act is an important section which requires to be noted with some deeper scrutiny. Section 68-FF 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 as stipulated under Section 68-D(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 68-FF therefore makes it clear that once the 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 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, if the operation by any existing permit-holder is saved either fully or partially that as rightly stated in “Raghuram 1990 Supp SCC 361” and “Egappan (1987) 2 SCC 47”, 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 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.

48. Once things get frozen, the frozen stage can be changed only by way of a permitted process. Here, when by virtue of Section 68-FF 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 provision by which such modification or alteration can be effected can be only by applying Section 68-E, which is the legally permissible 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 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 68-E 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 68-FF of the Act and other relevant provisions falling under Chapter IV-A. In our considered opinion, any other interpretation would run contrary to the prescription contained in Chapter IV-A of the Motor Vehicles Act.

49. While interpreting Section 68-FF of the Act, therefore we are convinced that that is the only manner in which an interpretation to the said Section 68-FF can be made and in no other manner. The only other alternate available is what is provided under Section 68-E of the Act which again is within the jurisdiction of the State Transport Undertaking or the State Government under sub-section (1) or (2) as the case may be.

50. 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 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, when the question of conflict as between “Jayaram 1984 Supp SCC 244” and “Egappan (1987) 2 SCC 47” was noted while making the present reference to the Constitution Bench in the order dated 22-7-2003 Civil Appeal No. 4480 of 1998, 1990 Supp SCC 361, “CAs Nos. 4480-81 of 1998, 7195-97 of 2001, 7299 of 2002, 1984 Supp SCC 244, 1990 Supp SCC 361, the conflict really pertains to the variation applied for both by way of increase in trips as well as increase of vehicles.

51. Having analysed the abovereferred to decisions and the 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:

51.1. Chapter IV-A supersedes any inconsistent provisions in Chapter IV.

51.2. The policy of the legislature is clear from Section 68-C 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.

51.3. Grant of variation under Section 57(8) will be as good as grant of a new permit.

51.4. Section 57(8) is controlled by Section 68-FF falling under Chapter IV-A, by virtue of the superseding effect of Section 68-B also falling under Chapter IV-A.

51.5. Once a scheme formulated under Section 68-D gets approved under Section 68-D(3) of Chapter IV-A, then all the permits in the route/area covered by the scheme will get frozen by virtue of operation of Section 68-FF.

51.6. The effect of Section 68-FF can be altered/modified/cancelled only in the manner as provided for under Section 68-E and in no other manner.

51.7. By virtue 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 by an approved scheme.

51.8. 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 68-FF.

51.9. The proposition of law, laid down by this Court in “Jayaram 1984 Supp SCC 244” impliedly stood overruled in “Adarsh Travels (1985) 4 SCC 557”.

51.10. 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.

51.11. 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 will prevail over it.

51.12. The approved scheme will exclude the operation of other stage carriage services on the route/area covered by the Scheme, except those whose names are mentioned in the scheme and to the extent to which such exception is allowed.

51.13. 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 service by the State Transport Undertaking in relation to any area or route or portion thereof (Adarsh Travels (1985) 4 SCC 557).

51.14. 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 authorised so to do by the terms 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 originally granted to him covered the notified route or area (Adarsh Travels (1985) 4 SCC 557).

52. Having regard to the above propositions, which we are able to arrive at, we hold that the judgment in Karnataka SRTC v. B.A. Jayaram 1984 Supp SCC 244 is no longer a good law and the decision in Pandiyan Roadways Corpn. Ltd. v. M.A. Egappan (1987) 2 SCC 47 stands approved which is in tune with the Constitution Bench decision in Adarsh Travels Bus Service v. State of U.P. (1985) 4 SCC 557 and the observations made in R. Raghuram v. P. Jayarama Naidu 1990 Supp SCC 361 stands approved.

53. 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 wherever it is applicable.