# G.T. VENKATASWAMY REDDY v. STATE TRANSPORT AUTHORITY & ORS

- **Citation:** [2016] 8 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2016
- **Case number:** Civil Appeal No. 4480of1998
- **Bench:** T.S. Thakur, Fakkir Mohamed Ibrahim Kalifulla, S.A. Bobde, R. Banumathi, Uday Umesh Lalit
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/g-t-venkataswamy-reddy-v-state-transport-authority-ors-31381
- **Pages:** 35

## Headnote

Motor Vehicles Act, 1939: ss.48, 57(8), 63 - 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 -
Held: A close reading of the sub-section (8) of s.57 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, mandatorily to be
treated as an application for the grant of a new permit - s.57(8) is
controlled by s. 68FF falling under Chapter IV-A, by virtue of the
superseding effect of s.68B also falling under Chapter IVA - Once
a scheme formulated under s. 68D gets approved, then all the permits
in the route/area covered by the scheme get frozen by virtue of
operation of s.68FF - The effect of s.68FF can be altered /modified/
cancelled only in the manner as provided for under s.68E and in
no other manner - By virtue of that, either a grant of a ne11• 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 ..:. 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 s.68FF.
s.57 - Application for variation of permit - Requirement for
its grant - Held: A conspectus consideration of sub-sections (1) to
(5) and (7) along with sub-section (8) of s.57 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
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[2016] 8 S.C.R.
A
be followed for the grant of a new permit have to be followed in
letter and spirit even with reference to an application for increasing
the trips as well as for increasing the number of vehicles.
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Answering the reference, the Court
HELD: 1.1 A close reading of the sub-section (8) of section
57 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,
mandatorily to be treated as an application for the grant of a new
permit. A close reading of sub-sections (1) to (7) demonstrate
how such provisions mandates compliance of 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). It is not as if such procedures
prescribed in sub-sections (1) to (7) barring sub-section (6) are
to be followed casually and that the same would ultimately result
in grant of variation irrespective of compliance or non-compliance
of 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 subsection (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

## Text

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[2016] 8 S.C.R. 1
G.T. VENKATASWAMY REDDY
v.
STATE TRANSPORT AUTHORITY & ORS.
(Civil Appeal No. 4480of1998)
JULY19,2016
[T.S. THAKUR, CJI, 'FAKKIR MOHAMED IBRAHIM
KALIFULLA, S.A. BOBDE, R. BANUMATHI AND
UDAY UMESH LALIT, JJ.]
Motor Vehicles Act, 1939: ss.48, 57(8), 63 - 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 -
Held: A close reading of the sub-section (8) of s.57 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, mandatorily to be
treated as an application for the grant of a new permit - s.57(8) is
controlled by s. 68FF falling under Chapter IV-A, by virtue of the
superseding effect of s.68B also falling under Chapter IVA - Once
a scheme formulated under s. 68D gets approved, then all the permits
in the route/area covered by the scheme get frozen by virtue of
operation of s.68FF - The effect of s.68FF can be altered /modified/
cancelled only in the manner as provided for under s.68E and in
no other manner - By virtue of that, either a grant of a ne11• 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 ..:. 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 s.68FF.
s.57 - Application for variation of permit - Requirement for
its grant - Held: A conspectus consideration of sub-sections (1) to
(5) and (7) along with sub-section (8) of s.57 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
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[2016] 8 S.C.R.
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be followed for the grant of a new permit have to be followed in
letter and spirit even with reference to an application for increasing
the trips as well as for increasing the number of vehicles.
B
c
D
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Answering the reference, the Court
HELD: 1.1 A close reading of the sub-section (8) of section
57 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,
mandatorily to be treated as an application for the grant of a new
permit. A close reading of sub-sections (1) to (7) demonstrate
how such provisions mandates compliance of 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). It is not as if such procedures
prescribed in sub-sections (1) to (7) barring sub-section (6) are
to be followed casually and that the same would ultimately result
in grant of variation irrespective of compliance or non-compliance
of 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 subsection (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. [Paras 38, 39] [27-BD; 28-F-H; 29-A-B]
2. The requirement of giving a public hearing coupled with
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
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AUTHORITY
requirement of personal hearing to the applicant as well as the A
person making the representation is yet another prescription
which again shows that very serious consideration should be
given to the application for variation in as much 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.
[Para 40)(29-C-D)
R.Raghuram v. P. Jayarama Naidu and others 1990
(Supp) SCC 361 - affirmed.
Karnataka State Road Transport Corporation,
Bangalore v. B.A.Jayaram and others 1984 (Supp)
SCC 244 : 1984 SCR 768 - overruled.
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3. Section 68-B of the Act which falls under Chapter IV-A
states that all the provisions contained in Chapter IV-A shall have
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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. In so far as,
Section 57(8) of the Act is concerned, there will be no
inconsistency with any of the provisions contained in Chapter
IV-A. The said Section 57 will apply in all force even in respect
of the prescription contained in the provisions under Chapter
IV-A viz., Section 68A to 681 of the Act. [Para 43][30-D-E)
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4. The formulation of a scheme is to be prepared and
published by a State Transport Undertaking in respect of the
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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
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interest and such scheme should be prepared and published.
Once such a scheme is formulated with the above avowed objects
in mind and is notified, under Section 68D, every person who is
already providing transport facility in that area or route or any
association representing persons interested in the provision of
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[2016)8 S.C.R.
road transport facilities recognized 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. Under sub-section (2) of Section 68D 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 scl eme. Under Section 68E 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 sub-sections 68C and 68D 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 Section 68C and 68D of the Act under
D the proviso to Section 68E. That apart under sub-section (2) of
Section 68E of the Act, the State Government is fully empowered
to modify any scheme published under sub-section (3) of Section
68D of the Act after giving an opportunity of hearing to the State
Transport Undertaking, as well as, to any other person who in
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the opinion of the State Government is likely to be affected by
the proposed modification. Once the approved scheme comes
into effect, under Section 68F of the Act, the State Transport
Undertakings can be issued with the required permits. [Paras
44, 45][30-F-H; 31-A-B, C-F]
5. Section 68FF creates a restriction on grant of permits in
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respect of notified area or notified route. A close reading of the
said provision discloses that where an approved scheme as
stipulated under Section 68D(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 68FF therefore makes it clear that once the
G 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
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G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
5
AUTHORITY
Undertaking alone is exclusively permitted to operate the service A
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 'RAGIIURAM' and 'EGAPPAN',
such operation by other private operators gets frozen and while
interpreting Section 57 (8) of the Act that application for variation
will be nothing but an application for grant of a new llermit.
Therefore, even in respect of protected operation under the
scheme of any existing operator, as 011 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. Once things get
frozen, the frozen stage can be changed only by way of a permitted
process. Herc, when by virtue of Section 68FF 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 68E, which is the legally
pc1·missible 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
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by way of increase in the number of trips or addition of vehicle
without any modification or alteration effected under Section 68E
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 68FF of
the Act and other relevant provisions falling under Chapter IVF
A. Any other interpretation would run contrary to the prescription
contained in Chapter IV-A of the Motor Vehicles Act. (Paras 46, G
47)(31-G-H; 32-A-C, D-G]
6. The legal propositions are:
Chapter IV-A supersedes any inconsistent provisions in
Chapter IV. The policy of the Legislature is clear from Section
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[2016] 8 S.C.R.
A 68C 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
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the public interest. Grant of variation under Section 57(8) will be
as good as grant of a new permit. Section 57(8) is controlled by
Section 68FF falling under Chapter IV-A, by virtue of the
superseding effect of Section 68B also falling under Chapter IVA.
Once a scheme formulated under Section 68D gets approved
under 68D(3) of Chapter IVA, then all the permits in the
route I area covered by the scheme will get frozen by virtue of
operation of Section 68FF. The effect of Section 68FF can be
altered I modified I cancelled only in the manner as provided for
under Section 68E and in no other manner. By virtue of the above,
either a grant of a new permit or the variation of an existing permit
D of private operator cannot be ordered in respect of an area or
route covered by an Approved Scheme. 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
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permissible under Section 68FF. The proposition oflaw, laid down
by this Court in 'JAYARAM' impliedly stood overruled in
'ADARSH TRAVELS'. 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. Even if there is an interstate 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 68B of the Act. Section 63 being in Chapter IV
of the Act, the Scheme approved under Chapter IV-A will prevail
over it. The Approved Scheme will exclude the operation of other
stage carriage services on the Route I Area covered by the
G Scheme, except those whose names are mentioned in the Scheme
and to the extent to which such exception is allowed. 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
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G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
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service by the State Transport Undertaking in relation to any
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Area or Route or portion thereof (ADARSH TRAVELS). 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 authorized so to do by the term of
the scheme itself. He· may not operate on any part or portion of
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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). [Para 50)(33-E-II; 34-A-H; 35-A-C]
Pa11diya11 Roadways Corporation Ltd. v. MA.Egappan
1987 (2) SCC 47 : 1987 (2) SCR 391; Adarsh Ti·avels
Bus Service and another v. State of UP. and others
(1985) 4 sec 557- approved.
Karnataka State Road Transport Corporation,
Bangalore v.· Karnataka State Transport Authority,
Bangalore and others 1987 (Supp) SCC 648- referred
to.
Case Law Reference
1990 (Supp) sec 361
affirmed
Para 1
1984 SCR 768
overruled
Para4
1987 ( 2 ) SCR 391
approved
Para4
(1985) 4 sec 557
approved
Para4
1987 (Supp) sec 648
referred to
Para4
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4480
of1998.
From the Judgment and Order dated 23.02.1998 of the High Comt
of Judicature at Madras in C.R.P. No. 553 of 1988
WITH
C. A. No. 4481of1998, C. A. Nos. 7195-7197 of2001, C. A.
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Nos. 2782, 7299 of2002, C.A. Nos.3605, 3606, 3633, 3731-3733, 3853
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of2003, SLP (C) Nos. 22621-22622 of2015.
K. K. Venugopal, Ms. Kiran Suri, A. Mariarputham, Amit Singh
Chaddha, Thomas P. Joseph, Raju Rammachandran, Sr. Advs.,
R. Venkataramani, AAG, N. D. B. Raju, M. E. Nagesh, Rohit Bhat,
Guntur Prabhakar, S. J. Amith, Gautam Kumar, Dr. (Mrs.) Vipin Gupta,
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SUPREME COURT REPORTS
[2016] 8 S.C.R.
M. Palani, Ms: Aruna Mathur, Avneesh Arputham, Yusuf Khan,
Ms. AnuradhaArputham, M/s. Arputham Aruna & Co., Balaji Srinivasan,
Ms. Vaishnavi Subrahmanyam, Ms. Srishti Govil, Dilpreet Singh, Mayank
Kshirsagar, Ms. Pratiksha Mishra, Arunava Mukherjee, M. Gireesh
Kumar, Sriram P., Ankur S. Kukarni, Yijay Kumar, Jayanth Muth Raj,
Ms. Malavika J., Sureshan P., Arunava Mukher, N. D. B. Raju,
N. Ganpathy, M. E. Nagesh, B. Balaji, Muthuvel Palani, Vikram Aditya
Narayan, Ms. M. Yijay Kumar T., Venkateshwar Rao Anumolu, Goli
Rama Krishna, Shashwat Goel, J. N. Singh, G. Ramakrishna Prasad,
R. Ayyam Perumal, A. V. Rangam, Ms. D. Bharathi Reddy, K. V. Mohan,
R. S. Hegde, Ms. Farhat Jahan Rehmani, Shanti Prakash, Rajeev Singh,
V. N. Raghupathy, Advs. for the appearing pa1ties.
The Judgment of the Court was delivered by
FAKKIR MOHAMED IBRAHIM KALIFULLA, J. I. This
reference to this Constitution Bench was made by a Division Bench of
D this Court in their order dated 22.07.2003 made in the case of
R. Raghuram Vs. P. Jayarama Naidu and others reported in 1990
(Supp) SCC 361, which reference though was initially made to a Three
Judges Bench, was subsequently referred to the Constitution Bench by
the Three Judges Bench led by the Honourable The Chief Justice of
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India vi de order dated 01.12.2004. As the issues raised and argued
before us were common, on the question referred, we heard arguments
in common.
2. We heard the arguments of Mr. K.K. Venugopal, learned senior
counsel for the appellant in the C.A.NoJ606/2003, Ms. Kiran Suri,
learned senior counsel for the appellant in C.A.No.4480/1998, Mr. A.
Mariarputham, learned senior counsel for the appellant in C.A.Nos. 71957197 /200 I, Mr. Amit Singh Chaddha, learned senfor counsel for the
appellant in C.AJ853/2003 and Mr. Raju Rammachandran, learned
seniOr counsel for the respondent(s) in C.A.No.4480/I 998.
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 counsels for the appellants, while Mr. Raju
Ramachandran, learned senior counsel addressed arguments on behalf
of the respondents in these appeals.
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
9
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
4. Mr. K. K. Venugopal, learned senior counsel for the appellant
A
in C.A.3606 of 2003 made & brief reference to the order dated
22.07.2003, by which the present reference came to be made to the
Constitution Bench and the subsequent order dated 01.12.2004 as we! I.
Learned senior counsel in his submissions, fairly pointed out that the
issue concerned in this reference has to be considered by referring to
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the decisions reported in Karnataka State Road Transport Corporatiou,
Bangalore Vs. B.A.Jayaram tmd others - 1984 (Supp) SCC 244
(hereinafter referred to as 'JAYARAM'), Pa11tliya11 Roadways
Corporation Ltd. Vs. M.A.Egappan - 1987 (2) SCC 47 rbereinafter
referred to as 'EGAPPAN'), Adarsh Travels Bus Service a11d another
Vs. State of U.P. and others - (1985) 4 SCC 557 (hereinafter referred
to as 'ADARSH TRAVELS'), Kttrtutlttktt State Ro(l(I Transport
Corporation, Bangalore Vs. Karnataka Stttle Transport Authority,
Bangalore and otlters -1987 (Supp) SCC 648 (hereinafter referred
to as 'KSRTC') and R.Rag/111ram (supra) (hereinafter referred to as
'RAGHURAM').
5. The learned senior counsel made a detailed reference to the
list of dates commencing from 1963-64 when the initial permit in the
case of appellant in C.A.3606 of2003 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 12.03.1998
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 l 0.01.1985 to the State Transport
Authority (STA), Bangalore for grant of four additional singles and one
additional vehicle by the order dated I 0.01.1985, 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 the
STAT, Madras as well as that of the order ofthe learned Single Judge in
C.R.P.No.553of1988 and the order of the Division Bench in W.A.No.750
and 780 of2002 dated 23.03.2002 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
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[2016] 8 S.C.R.
A
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 68A, 688, 68FF falling under Chapter IVA of the Act while making his submissions.
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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' and
'EGAPPAN' since the existing permit in 'JAYARAM' was an exempted
one on the Nationalized Route and variation of that permit by added
singles and additional bus was an issue, while in 'EGAPPAN', the
operator was not one of the persons exempted under the Nationalized
scheme and on the other hand he was operating on a non-scheme route.
The learned senior counsel then contended that 'ADARSH TRAVELS'
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
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to whether an operator on that Route could operate with corridor
restrictions. The learned senior counsel submitted that the ratio in
'ADARSH TRAVELS' 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. As far as the case in 'RAGHURAM' is
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concerned, 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.
8. Lastly, he contended that the judgment in 'JAYARAM',
'RAGIIURAM' and 'KSRTC' support the case of the appellant, which
concerns grant of variation on a nationalized Route, that the appellant
was operating from 1965 and the variation was granted in 1985 and,
therefore, his operation should not bed isturbed in public interest.
9. Ms. Suri, learned senior counsel for the appellant in
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C.A.No.4480of1998, after referring to the list of dates rightlyfornmlated
the questions as under
l-1
(i) Whether variation is permissible in a notified scheme route?
and
(ii) Whether the Tamil Nadu Act disentitles counter signature of
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
interstate permit variation?
I 0. The learned senior counsel after making reference to
'EGAPPAN' judgment, submitted that the appellant's permit was covered
by a draft scheme. As regards the alleged conflict between 'JAYARAM'
and 'EGAPPAN', the learned senior counsel submitted that since the
scheme was at the draft stage, the position was different. As far as the
implication ofSection 68FF 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.
11. Mr. Mariarputham, learned senior counsel for the appellant in
C.A.Nos.7195-7197 of2001, submitted thatthe 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.
12. Mr. Chaddha, learned senior counsel for the appellant in
C.A.No.3853 of2003 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, in as much as the argument is that any interstate
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, learned senior
counsel sought to distinguish the case of the appellant.
13. As against the above submissions, Mr. Raju Ramachandran,
learned senior counsel forthe respondent in C.A.4480of1998 submitted
that Section 68B of the Act is the complete answer to the argument of
the learned counsel for the appellant in C.A.3853 of2003. 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.
14. Having heard learned senior counsel for the appellants and
the learned senior counsel for the respondent, we proceed to answer the
reference as under.
15. By order dated 22.07.2003, the Division Bench of this Court
after noting the reference made in the case of R.Raghuram (supra) to
a Constitution Bench and on finding that later the matter was then referred
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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 01.12.2004, the said Bench again referred the case back for
hearing before a Constitution Bench. That is how these appeals are
listed before us.
16. When we refer to the order dated 22.07.2003, we find an
apparent conflict in the view of the law taken in 'JAYARAM' and
'EGAPPAN'. It was also noted therein that the Constitution Bench
decision in 'ADARSH TRAVELS', wherein, similar question came to
be considered and decided was distinguished by a three Judge Bench of
this Court in 'KSRTC'. The case which got abated was reported in
'RAGHURAM'. When we read the order dated 22.07.2003, 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 01.12.2004, except making a reference
to the apparent conflict as between 'JAYARAM' and 'EGAPPAN' as
well as the distinction in 'ADARSJI TRAVELS' made in 'KSRTC', 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.,
'RAGJIURAM', while dealing with an identical issue, this Com1 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:
.. 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.
17. It is wot1hy to note that before formulating the said question
G.T. VENKATASWAMY REDDYv. STATE TRANSPORT
13
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
for reference to a Constitution Bench, the learned Judges cul led out the
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ratio decidendi in the Constitution Bench decision of • ADARSH
TRAVELS' and how the case in 'JAYARAM' run counter to the said
ratio and consequently, it was held that the ruling in 'JAYARAM' was
impliedly overruled in' ADARSH TRAVELS'.
18. Keeping the said perception which weighed with this Court in
'RAGHURAM' 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
22.07 .2003 and 01.12.2004 were in all fours covered by the reference
made in' RAGl/URAM' 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
surviyed and the said question requires to be answered in this reference.
19. In order to answer the above referred question, we have to
make note of the principles which were noted in the judgments reported
in 'JAYARAM'(supra), 'ADARSHTRAVELS'(supra), 'EGAPPAN'
(supra) - 'KSRTC' (supra) and 'RAGIIURAM' (supra), apart from
the relevant provisions falling under Chapter IV and JV-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 analyze the question
for consideration and render our decision.
20. 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 intricated 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 analyze
the decisions mentioned above.
21. 'JAYARAM' (supra) is the stai1ing 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' has been formulated in paragraph 9 which reads as under:
"9. On the above rival contentions, two main questions
arise for our consideratio11, 11a111ely,
(1) Whether sub-section (8) of section 57 creates a legal
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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 ? "
22. Before answering the above questions the learned Judges
made a detailed reference to the various provisions contained in Chapter
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 paragraph 15 :
"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 subsection 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 lmv. Considerable emphasis 11•ere 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
subsection (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 corol!aly
that such an application if granted would result in the
grant qf a new permit. "
23. Thereafter, the learned Judges referred to sub-section I to 10
,of Section 57 of the Act in detail and then stated as under in paragraph 16:
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
"' 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
subsection 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 carriers permit. It is
for the purpose of providing that the procedure to be
followed in the case of an application made under subsection (81 is to be the same as the procedure to be
followed in the case of an application for a new permit
that sub-section (81 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 ......... " (Underlining is our.1)
24. While stating the law as above, the learned Judges sought
reliance upon the decision reported in Mis Shiv Chand Amolak Chand
v. Regional Transport Authority & Anr. -(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
paragraph 17:
"17 ....... Assuming. therefore, that m1 application for
variation of the conditions of a permit referred to in
sub-section (8) of Section 5 7 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
gpplication for variation the procedure are.scribed by
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sub-sections (3) to (7) of Section 57 and not for the
/21!IPOSe of providing that when the application for
variation is granted, the permit so varied would be
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deemed to be a new permit .......... " (Underlining is ours)
25. 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 paragraph 18:
"18. Even though when the condition of a permit is
allowed to be varied on an application made under subsection (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. Furthe1; 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 ca1111ot any ma11ner affect the
services operated by the Appella11t on such portions
since no passengers are allowed to be picked up or set
down or such portions. All that would happe11 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."
26. 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
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT
17
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
said decision, before reaching the ultimate conclusion in paragraph 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
68FF 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' can be approved or disapproved.
27. With that we come to the Constitution Bench decision in
'ADARSH TRAVELS', the question posed for consideration is noted
as under in the very first paragraph which is to the following effect:
·· ..... 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 sche111e rather than on the provisions of the statute,
as we shall presently show."
28. The Constitution Bench while dealing with the said question,
made a detailed reference to the provisions contained in Chapter IV-A
and while making reference to Section 68C of the Act, observed as
under in paragraph 5:
"5 . ...... The policy of the legislature is clearfro111 Section
68-C that the State Transport Undertaking may initiate
a sche111e 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
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may be prescribed."
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29. Thereafter in paragraph 6 it was held as under:
"6. It is thus seen that while the provisions of Chapter
JV-A are devised to override the provisions of Chapter
JV and it is expressly so enacted, the provisions of
Chapter IVA are clear and complete regarding the
manner and effect of the "take over" of the operation
or 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 added)
30. A further reference can be made to the emphasis made by the
Constitution Bench on the implication of Section 68C, Section 68D(3)
and Section 68FF of the Act in the light of the definition of the expression
'Route' in Section 2(28-A) oftheAct in paragraph 7.