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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 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). we hold that the judgment reported in Karnataka State Road Transport Corporation, Bangalore Vs. B.A. Jayaram and others - 1984 (Supp) SCC 244 is no longer a good law and the decision reported in Pandiyan Roadways Corporation Ltd. Vs. M.A. Egappan - (1987) 2 SCC 47 stands approved which is in tune with the Constitution Bench decision reported in Adarsh Travels Bus Service and another Vs. State of U.P. and others - (1985) 4 SCC 557 and the observations made in R.Raghuram Vs. P. Jayarama Naidu and others – 1990 (supp) SCC 361 stands approved. - 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.


                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.4480 OF 1998

G.T. Venkataswamy Reddy                                  …Appellant
                                   VERSUS

State Transport Authority & Ors.                        …Respondents
                                    With
C.A.  No.4481/1998,  C.A.  Nos.7195-7197/2001,   C.A.   No.2782/2002,   C.A.
No.7299/2002, C.A. No.3605/2003, C.A. No.3606/2003, C.A. No.3633/2003,  C.A.
Nos.3731-3733/2003, C.A. No.3853/2003, SLP(C) Nos.22621-22622/2015

                         J   U  D  G   M   E   N   T
Fakkir Mohamed Ibrahim Kalifulla, J.
This reference to this Constitution Bench was made by a  Division  Bench  of
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  India  vide  order  dated
01.12.2004.  As the issues raised and argued before us were common,  on  the
question referred, we heard arguments in common.


We heard the arguments of Mr. K.K. Venugopal,  learned  senior  counsel  for
the appellant in  the  C.A.No.3606/2003,  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.7195-7197/2001, Mr.  Amit  Singh
Chaddha, learned senior counsel for the appellant in C.A.3853/2003  and  Mr.
Raju  Rammachandran,  learned  senior  counsel  for  the  respondent(s)   in
C.A.No.4480/1998.

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.

Mr. K. K. Venugopal, learned senior counsel for the  appellant  in  C.A.3606
of 2003 made a 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 well.  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
State Road Transport Corporation, Bangalore Vs.  B.A.Jayaram  and  others  -
1984 (Supp)  SCC  244  (hereinafter  referred  to  as  ‘JAYARAM’),  Pandiyan
Roadways Corporation Ltd. Vs. M.A.Egappan - 1987  (2)  SCC  47  (hereinafter
referred to as ‘EGAPPAN’), Adarsh Travels Bus Service and another Vs.  State
of U.P. and others – (1985) 4 SCC 557 (hereinafter referred  to  as  ‘ADARSH
TRAVELS’),   Karnataka  State  Road  Transport  Corporation,  Bangalore  Vs.
Karnataka State Transport Authority, Bangalore and others -1987  (Supp)  SCC
648  (hereinafter  referred  to   as   ‘KSRTC’)   and   R.Raghuram   (supra)
(hereinafter referred to as ‘RAGHURAM’).

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 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
12.03.1998  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  10.01.1985  to  the
State Transport Authority (STA), Bangalore  for  grant  of  four  additional
singles and one additional  vehicle  by  the  order  dated  10.01.1985,  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  of  the  learned
Single Judge in C.R.P.No.553 of 1988 and the order of the Division Bench  in
W.A.No.750 and 780 of 2002 dated 23.03.2002 pursuant to  which  the  present
appeal came to be filed.
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 68A, 68B, 68FF falling under Chapter IV-A  of  the
Act while making his submissions.

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 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  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.

Lastly, he contended that the judgment in ‘JAYARAM’, ‘RAGHURAM’ 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  be
disturbed in public interest.

Ms. Suri, learned senior counsel for the appellant in C.A.No.4480  of  1998,
after referring to the list of dates rightly  formulated  the  questions  as
under

Whether variation is permissible in a notified scheme route? and

Whether the Tamil Nadu  Act  disentitles  counter  signature  of  interstate
permit variation?





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 of Section  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.

Mr. Mariarputham, learned senior counsel for the appellant in  C.A.Nos.7195-
7197 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.

Mr. Chaddha, learned senior counsel for  the  appellant  in  C.A.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, 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.

As against the above submissions,  Mr.  Raju  Ramachandran,  learned  senior
counsel for the respondent in C.A.4480 of 1998 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 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.

Having heard learned senior counsel  for  the  appellants  and  the  learned
senior counsel for the respondent, we proceed to  answer  the  reference  as
under.

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  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.

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 ‘ADARSH 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., ‘RAGHURAM’, 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:

“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.

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’  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’.

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  ‘RAGHURAM’  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.

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),
   ‘ADARSH  TRAVELS’  (supra),  ‘EGAPPAN’  (supra)  –  ‘KSRTC’  (supra)  and
‘RAGHURAM’  (supra),  apart  from  the  relevant  provisions  falling  under
Chapter 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 analyze the question for consideration and render  our  decision.


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.

‘JAYARAM’ (supra) 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’  has
been formulated in paragraph 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 ?”

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 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  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
corollary that such an application if granted would result in the  grant  of
a new permit.”

Thereafter, the learned Judges referred to sub-section 1 to  10  of  Section
57 of the Act in detail and then stated as under in paragraph 16:


 “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 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………” (Underlining is ours)

While stating the law as above, the learned Judges sought reliance upon  the
decision reported in M/s 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  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……….” (Underlining is ours)

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 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 any manner affect the  services
operated by the Appellant on such portions since no passengers  are  allowed
to be picked up or set down or 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.”

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 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.

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  scheme  rather  than  on  the
provisions of the statute, as we shall presently show.”

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 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.”

Thereafter in paragraph 6 it was held as under:

“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 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)

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) of the Act in paragraph 7. It will be useful to refer  to  the  said
part of the judgment which is to the following effect:

“7. A careful and diligent perusal of sec.68-C, sec.68-D(3) and sec.68FF  in
the light of  the  definition  of  the  expression  'route'  in  sec.2(28-A)
appears to make it manifestly clear that once a scheme  is  published  under
sec.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 added)

The Constitution Bench ultimately answered  the  question  posed  by  it  by
holding as under in paragraph 8:

“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 state carriage between these 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……..”

With that we shall now refer to the  so-called  conflicting  judgment  viz.,
‘EGAPPAN’ (supra). The facts in the said case  are  noted  in  paragraph  2,
which requires to be noted and the same is extracted as under:

“2. The facts of the case are these. On June 30, 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 the  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  February  28,
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 Kms. 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  Trans-  port
Authority a second variation of his permit under which he was authorised  to
operate his stage carriage service  over  a  distance  of  16.6.  Kms.  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 the revision petition. This appeal by special leave  is
filed against the above order of the High Court.” (Underlining is ours)

Thereafter, while dealing with the provisions contained in Chapter IV-A,  it
was held as under in   paragraph 4:

“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 to 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 June 30, 1976 to which  we
have already adverted. The approved scheme, as mentioned  earlier,  excludes
the operation by others of stage carriage services on  the  above  mentioned
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 and Another Vs. State of U.P. and Others, [1985] 4  S.C.C.  557.
Chinnappa Reddy, J. speaking for the Constitution  Bench  observed  at  page
566 thus:…..” (Emphasis added)

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’
in para 7 of that judgment has been found to have been abused  in  ‘EGAPPAN’
by getting two variations by a  non-scheme  operator  successfully  and  was
able to operate without any hindrance.

The last of the decision which requires to be noted in the  present  context
is the one reported in ‘KSRTC’ (supra).  That was  also  a  case  where  the
route was covered by an approved scheme under Chapter IV-A of the  Act.  The
respondents 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 above referred to two judgments  merely  stated  that
the law laid down in ‘ADARSH TRAVELS’ does not apply to the  facts  of  that
case and without any discussion much  less  detailed  discussion,  dismissed
the appeal.

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.,  Section  68-B,  68-C,
68-D, 68-E, 68-F(1D) 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.”

                                    *****

68B. Chapter IVA to over ride 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.

68C. 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.


68D. 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.”


68E. Cancellation or modification  of  scheme:-  (1)  Any  scheme  published
under sub-section (3) of section  68D  may  at  any  time  be  cancelled  or
modified by the State transport undertaking and the procedure laid  down  in
section 68C and section of 68D 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 68C and section 68D, 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 time-table  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  subsection  (3)  of
section 68D, 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.


68F(1-D) Save as otherwise provided in sub-section (lA) or subsection  (lC),
no permit shall, be  granted  or  renewed  during  the  period  interevening
between the date of publication, under section 68C 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 68C 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 68D.]


                                    *****


68FF. 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 68D 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.”

At this juncture,  it  is  necessary  to  state  that  in  the  decision  in
‘JAYARAM’ and ‘ADARSH TRAVELS’,  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  above  referred  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.

(i) 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 apply for grant of permit,  which  includes  stage  carriage  permit.
But, when we make a close reading of the sub-sections (1)  to  (7),  we  can
presently 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).  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.

(ii) 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.

(iii) 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.

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

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

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
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  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.

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  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.  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 a  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
pass 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.

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.

Therefore, we are not  in  a  position  to  approve  of  the  conclusion  in
‘JAYARAM’ 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’.  We also  state  that  the  contra  opinion
expressed in ‘RAGHURAM’ will hold good.

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.
In so far as, Section 57(8) of the Act, 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., Section 68A to 68I of the Act.

Keeping the said broad statutory prescription vis-à-vis Section  57  of  the
Act, when we proceed to analyse Section 68C 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 68C 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 68D, 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 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 scheme. 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 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 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.

Section 68FF of the Act is an important section which requires to  be  noted
with some deeper scrutiny. Section 68FF 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 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  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’  and
‘EGAPPAN’, 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.

Once things get frozen, the frozen stage can be changed only  by  way  of  a
permitted process.  Here, 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 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  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  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.

While interpreting Section 68FF of the Act, therefore we are convinced  that
that is the only manner in which an interpretation to the said Section  68FF
can be made and in no other manner.  The only other alternate  available  is
what is provided under Section 68E 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.

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’  and  ‘EGAPPAN’  was  noted  while
making the present reference to the Constitution Bench in  the  order  dated
22.07.2003, the conflict really pertain to the variation  applied  for  both
by way of increase in trips as well as increase of vehicles.

Having  analysed  the  above  referred  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:

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

The policy of the Legislature is clear  from  Section  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 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 / area covered by the  scheme
will get frozen by virtue of operation of Section 68FF.

The effect of Section 68FF can be altered / modified  /  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 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
Section 68FF.

The proposition of law, 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 / Area covered  by  the  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  service  by  the   State   Transport
Undertaking in relation to any 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 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).



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

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.



                                                    .………………………………………..C.J.I.
                                                               [T.S. Thakur]



                                                    ..….………………………………………...J.
                                          [Fakkir Mohamed Ibrahim Kalifulla]



                                                    ..….………………………………………...J.
                                                                [S.A. Bobde]



                                                    ..….………………………………………...J.
                                                              [R. Banumathi]



                                                    ..….………………………………………...J.
                                                          [Uday Umesh Lalit]

New Delhi;
July 19, 2016

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