Summary
The Supreme Court held that private operators holding inter-State stage carriage permits granted under a Madhya Pradesh-Uttar Pradesh reciprocal transport agreement made under Section 88 of the Motor Vehicles Act, 1988 cannot ply on portions of inter-State routes that overlap intra-State routes notified in UPSRTC's favour under an approved scheme. Chapter VI overrides Chapter V by Section 98, and an inter-State agreement is not law, following Adarsh Travels. The High Court's directions to countersign permits and permit pick-up and drop were set aside. The two States were asked to confer on working out the agreement in the public interest.
Issues
- Whether a stage carriage permit can be granted to a private operator on an inter-State route under an inter-State reciprocal transport agreement made under Section 88 of the 1988 MV Act, when part of that route is common to an intra-State route notified under an approved scheme under Chapter VI.
- Whether the reciprocating State's transport authority could be directed to countersign permits issued by the other State's authority for routes said to have been released on the winding up of MPSRTC.
- Whether the absence of the Central Government's approval under the proviso to Section 100(3) affected the notified routes relied on by UPSRTC.
Provisions considered
- Section 88(5) and (6), Motor Vehicles Act, 1988Inter-State agreements fixing permits are proposed and finalised after publication and objections, and the State and Regional Transport Authorities must give effect to them. Such an agreement is nonetheless a compact between States, not a law, and being made under Chapter V it yields to Chapter VI. (¶¶ 25, 43, 45)
- Section 98, Motor Vehicles Act, 1988Because Chapter VI and orders under it have effect notwithstanding anything inconsistent in Chapter V or any instrument, approved schemes and notified routes override inter-State agreements made under Section 88. (¶¶ 26, 45)
- Sections 99, 100, 102 and 103, Motor Vehicles Act, 1988These govern the preparation, approval, modification and implementation of schemes for State transport undertakings, including exclusion of others from a notified route or portion of it. The proviso to Section 100(3) (Central Government approval for inter-State schemes) was raised by the permit holders, but the Court decided the matter on the overriding effect of Chapter VI. It suggested the States consider partial exclusion of inter-State routes from the approved scheme under Section 99. (¶¶ 22, 26, 45, 49)
- Sections 63 and 68-B to 68-F (Chapter IV-A), Motor Vehicles Act, 1939The precedents under these corresponding provisions, which held that an inter-State agreement cannot override an approved scheme and that no permit can be granted on a route overlapping any part of a notified route where the scheme prohibits it, were applied to the 1988 Act. (¶¶ 30, 31, 37, 41, 42)
Held
- An inter-State reciprocal transport agreement is an agreement between two States and not law. A scheme approved under Chapter VI (formerly Chapter IV-A of the 1939 Act) prevails over it in respect of inter-State routes (following T.N. Raghunatha Reddy and S. Abdul Khader Saheb). (¶¶ 30, 31, 45)
- Where a private operator's route traverses the same line of highway as even part of a notified route, the application must be decided in the light of the scheme: conditions in the scheme must be fulfilled, and a total prohibition requires rejection. A mere intersection is not overlapping. Mysore SRTC (I), which required express exclusion of inter-State operators in the scheme, was overruled by the Constitution Bench in Adarsh Travels, and T.V. Nataraj held that inter-State operators are excluded too without express authorisation in the scheme. (¶¶ 32, 33, 37, 40, 41, 42)
- Applying those binding decisions, the question was no longer res integra. No private operator holding a permit issued by the Madhya Pradesh STA could be permitted to ply on an inter-State route overlapping a notified intra-State route in Uttar Pradesh, and the High Court's mandamus to countersign permits and permit pick-up and drop could not stand. (¶¶ 28, 44, 45, 48, 50)
- The agreement provided that routes reserved for MPSRTC would pass to private operators if MPSRTC were wound up, but there was no clinching evidence that MPSRTC had been wound up; the record at best showed winding up was under way. (¶¶ 43, 44, 48)
- Noting the lack of application of mind by both States to the overlap problem and the need to avoid inconveniencing the travelling public (as observed in Adarsh Travels and T.V. Nataraj), the Court asked the Principal Secretaries (Transport) of both States to meet within three months. They are to consider whether Annexure B routes may be moved to Annexure A if MPSRTC is shown to be wound up, and whether inter-State routes may be partially excluded from the approved scheme, leaving these policy matters to the States. An inter-State agreement cannot be revoked without both States' consent. (¶¶ 45, 48, 49)
Result
Civil appeals allowed and the High Court's judgments and orders set aside; Writ Petition (C) No. 748 of 2024 dismissed; the States of MP and UP may proceed as indicated (meeting of Transport Secretaries within three months); no order as to costs.