1989 JTR(SC) 643
1990 AIR(SC) 412 ; 1990 1 CurCC(SC) 97 ; 1989 4 JT 538 ; 1990 1 JT 412 ; 1989 2 Scale 1320 ; 1990 1 Scale 449 ; 1990 2 SCC 371 ; 1990 1 SCR 951 ; 1990 1 UJ 326 ; 1990 2 UJ 41 ; 1990 KHC 657
SUPREME COURT OF INDIA
E.S. VENKATARAMIAH CJI., RANGANATH MISRA, J.
R. Raghuram, Petitioner
Versus
P. Jayarama Naidu and others, Respondents.
Review Petn. No. 324 of 1989 In Civil Appeal No. 4126 of 1988, D/-15-12-1989.
Act
Referred
:INDUSTRIAL DISPUTES ACT : S.25
MOTOR VEHICLES ACT : S.98, S.57(8), S.88, S.68(b), S.80(3), S.68(d), S.100, S.63
(A) The Motor Vehicles Act, 1939, read in conjunction with its Chapter IV-A provisions governing the nationalisation of routes, establishes the framework for regulating stage carriage permits. Section 68C authorises the publication of draft schemes for route regulation, while Section 68(b) and Section 68(d) outline the powers of State Transport Authorities and the conditions under which permits may be modified. Sections 63 and 100, situated in other chapters, contemplate the possibility of inter-State agreements for trip variations, but Section 68-B ensures that such agreements cannot override the provisions of Chapter IV-A. Sections 57(8) and 80(3) address the permissible variations in existing permits, and Section 88 provides mechanisms for appeals against decisions of transport authorities. This case specifically examines the interplay between pending draft schemes, the subsequent publication of an approved scheme, and the rights of private operators to seek variations in their permits, particularly concerning the increase of trips on notified route portions.
(B) The core legal principles delineated include: (i) the supremacy of an approved scheme over any conflicting provisions, including inter-State agreements, under Section 68-B; (ii) the protection of a private operators existing permit rights until an approved scheme is formally published; (iii) the prohibition on increasing the number of trips on a notified route portion if the approved scheme does not authorise such an increase, as it constitutes the grant of a new permit and violates the schemes preservation of the status quo; and (iv) the interpretation that Section 57(8) does not create a legal fiction to circumvent the schemes protections.
Facts of the case:
The dispute arose from a petition for review of a 1989 decision concerning the right of a private operator to increase trips on a notified route portion between Chittoor and Kannikapuram under Chapter IV-A of the Motor Vehicles Act, 1939. While a draft scheme was initially considered, an approved scheme was later found to be in force, which did not authorise the increase. The operator had been permitted to increase trips during the pendency of the draft scheme, but the State Transport Appellate Tribunal reversed the order. The High Court had previously dismissed a writ petition, holding that variations could not be allowed under a draft scheme. The Supreme Courts earlier judgment in January 1989 allowed the appeal, but a review petition highlighted the existence of the approved scheme, leading to the central legal question.
Findings of Court:
The Court found that the approved scheme protected the number of trips operated by existing permit holders on the notified route portion as of the publication date and did not authorise an increase. It held that allowing an increase in trips, even for an existing permit holder, would amount to granting a new permit, which would violate the schemes objective of protecting the state transport undertakings finances and maintaining economy and coordination. The Court also found that Section 63, even if an inter-State agreement existed, could not override the provisions of Chapter IV-A. Consequently, the 1989 judgment was deemed erroneous and in need of review.
Issues:
The primary issues addressed were: (i) whether a private operator can seek a variation to increase the number of trips on a portion of a notified route after the publication of an approved scheme; (ii) whether Section 57(8) of the Act permits such an increase without constituting a grant of a new permit; and (iii) whether an inter-State agreement under Section 63 can override the provisions of Chapter IV-A.
Ratio Decidendi:
The Court reasoned that the publication of an approved scheme under Chapter IV-A freezes the number of trips for existing operators, and any subsequent variation increasing such trips constitutes a new permit, which is not permitted. The schemes purpose is to protect the state transport undertaking from additional burden and to ensure economic coordination, a purpose that would be defeated by allowing increases. Furthermore, Section 68-B ensures that Chapter IV-As provisions prevail over other chapters, rendering inter-State agreements inapplicable to override the scheme.
Result:
The review petition was allowed, the 1989 judgment was set aside, and the matter was referred to a Constitution Bench for a definitive ruling on whether the number of trips of existing operators can be increased by granting a variation of a permit after the publication of an approved scheme.
(A) The Motor Vehicles Act, 1939, read in conjunction with its Chapter IV-A provisions governing the nationalisation of routes, establishes the framework for regulating stage carriage permits. Section 68C authorises the publication of draft schemes for route regulation, while Section 68(b) and Section 68(d) outline the powers of State Transport Authorities and the conditions under which permits may be modified. Sections 63 and 100, situated in other chapters, contemplate the possibility of inter-State agreements for trip variations, but Section 68-B ensures that such agreements cannot override the provisions of Chapter IV-A. Sections 57(8) and 80(3) address the permissible variations in existing permits, and Section 88 provides mechanisms for appeals against decisions of transport authorities. This case specifically examines the interplay between pending draft schemes, the subsequent publication of an approved scheme, and the rights of private operators to seek variations in their permits, particularly concerning the increase of trips on notified route portions.
(B) The core legal principles delineated include: (i) the supremacy of an approved scheme over any conflicting provisions, including inter-State agreements, under Section 68-B; (ii) the protection of a private operators existing permit rights until an approved scheme is formally published; (iii) the prohibition on increasing the number of trips on a notified route portion if the approved scheme does not authorise such an increase, as it constitutes the grant of a new permit and violates the schemes preservation of the status quo; and (iv) the interpretation that Section 57(8) does not create a legal fiction to circumvent the schemes protections.
Facts of the case:
The dispute arose from a petition for review of a 1989 decision concerning the right of a private operator to increase trips on a notified route portion between Chittoor and Kannikapuram under Chapter IV-A of the Motor Vehicles Act, 1939. While a draft scheme was initially considered, an approved scheme was later found to be in force, which did not authorise the increase. The operator had been permitted to increase trips during the pendency of the draft scheme, but the State Transport Appellate Tribunal reversed the order. The High Court had previously dismissed a writ petition, holding that variations could not be allowed under a draft scheme. The Supreme Courts earlier judgment in January 1989 allowed the appeal, but a review petition highlighted the existence of the approved scheme, leading to the central legal question.
Findings of Court:
The Court found that the approved scheme protected the number of trips operated by existing permit holders on the notified route portion as of the publication date and did not authorise an increase. It held that allowing an increase in trips, even for an existing permit holder, would amount to granting a new permit, which would violate the schemes objective of protecting the state transport undertakings finances and maintaining economy and coordination. The Court also found that Section 63, even if an inter-State agreement existed, could not override the provisions of Chapter IV-A. Consequently, the 1989 judgment was deemed erroneous and in need of review.
Issues:
The primary issues addressed were: (i) whether a private operator can seek a variation to increase the number of trips on a portion of a notified route after the publication of an approved scheme; (ii) whether Section 57(8) of the Act permits such an increase without constituting a grant of a new permit; and (iii) whether an inter-State agreement under Section 63 can override the provisions of Chapter IV-A.
Ratio Decidendi:
The Court reasoned that the publication of an approved scheme under Chapter IV-A freezes the number of trips for existing operators, and any subsequent variation increasing such trips constitutes a new permit, which is not permitted. The schemes purpose is to protect the state transport undertaking from additional burden and to ensure economic coordination, a purpose that would be defeated by allowing increases. Furthermore, Section 68-B ensures that Chapter IV-As provisions prevail over other chapters, rendering inter-State agreements inapplicable to override the scheme.
Result:
The review petition was allowed, the 1989 judgment was set aside, and the matter was referred to a Constitution Bench for a definitive ruling on whether the number of trips of existing operators can be increased by granting a variation of a permit after the publication of an approved scheme.
B.Kanta Rao, N.D.B.RAJU, S.SRINIVASA VARMA
JUDGMENT
VENKATARAMIAH, CJI.:- This is a petition for review of the decision dated 24th January, 1989 rendered in Civil Appeal No. 4125 of 1988. The question involved in this case relates to the right of a private operator to ply a stage carriage on a notified route under Chapter IV-A of the Motor Vehicles Act, 1939 (hereinafter referred to as the Act) or any part thereof. Although the case proceeded on the basis that there was only a draft scheme published under S. 68C of the Act it now transpires that there was an approved scheme in respect of major portion of the route in question. It is not disputed that between Chittoor and Kannikapuram the portion of the route Chittoor lruvaram Cross Kannikapurarn is a notified portion of the route. Under the scheme the holders of stage carriage permits operating on portions of the proposed route were not to be affected. Even while the draft scheme was pending the appellant P. Jayarama Naidu who was an existing permit holder applied for a variation of his permit as he desired an increase in the number of trips operated by him on a portion of the notified route. The State Transport Authority allowed an Increase in the number of trips but. on appeal the State Transport Appellate Tribunal reversed the order and refused the increase, A Writ petition was filed in the High Court and the same was dismissed on the ground that no variation in the conditions of the existing permit could be allowed in view of the draft scheme but this Court by its judgment dated January 24, 1989 allowed the appeal on the grounds that the draft scheme had not yet been finalised and then there could be no objection to the variation of the permit until there was an approved scheme.
2. A Review Petition was filed bringing to the notice of the Court that there was an approved scheme already and the appellant could not be permitted to operate on the portion of the notified route between Chittoor Kannikapuram.
3. In M/s. Adarsh Travels Bus Service v. State of U.P., AIR 1986 SC 319 a Constitution Bench of this Court has held that where a route is nationalised under Chapter IVA of the Act, a private operator with a permit to ply a stage permit over another route but which has a common overlapping sector with the nationalised route, cannot ply his vehicle over that part of the overlapping common sector, even with corridor restriction, such as that he would not be able to pick up or drop passengers on the overlapping part of the route unless such an exemption had bean allowed in the scheme itself. Even when the scheme provides that an existing operator is exempted from the operation of the scheme it only means that he can continue to operate his services with the existing number of trips on the date on which the scheme is published and it does authorise him to apply for a variation of his permit so that he can increase the number of trips on the overlapping portion of the notified route thus increasing the burden of private operation of vehicles on the notified route in questin. The variation authorising increasing the number of trips in fact amounts to granting A fresh permit to run one more stage carriage service doing one round trip on the notified route and that would be in violation of the scheme itself because the scheme protects only the number of trips which were being operated at the time of its publication.
4. Our attention is, however, drawn to another decision of this Court in Karnataka State Road Transport Corporation, Bangalore v. B. A. Jayaram, AIR 1984 SC 790 in which it has been held by a Bench consisting of two learned Judges that Section 57(8) does not create a legal fiction and grant of an application for variation in the conditions of one existing permit in respect of matter set out in Section 57(8) does not result in the grant of new permit in every case. With great respect to the learned Judges who decided the said case we feel that the said opinion is erroneous because the increase in the number of trips of vehicles which were being run under the existing permit does amount to grant of a new permit to operate one more stage carriage. Such a thing could not be permitted particularly in view of the decision in Adarsh Travelss case (AIR 1986 SC 316) (supra). The construction on the statute placed by the decision of this Court in Karnataka State Road Transport Corporations case (AIR 1984 SC 790) (supra) referred to above must be deemed to have overruled in Adarsh Travelss case (supra). The prejudice of the finances that is caused to the State Transport Undertaking for whose benefit the scheme is made is not so much by the number of vehicles used but by the number of trips that are operated on the notified route in question. The economy and co-ordination, two of the .factors governing a scheme would also be affected. On the basis of the above view, another Division Bench has disposed of another petition at the stage of admission.
5. Even if there is an inter-State agreement under Section 63 of the Act for increasing the number of trips, such an agreement cannot override the provisions of Chapter IV-A by virtue of Section 68-B of the Act. Section 63 being in the Chapter IV of the Act the scheme approved under Chapter IV-A prevails over it.
6. We therefore feel that the order dated 24th January, 1989 in Civil Appeal No. 4126 of 1986 has got to be reviewed in view of the fact that there was p approved scheme in force which did not authorise the increase in the number of trips of the vehicles belonging to the existing operators on the date of the scheme.
7. In view of the above we feel that this review petition should be referred to a Constitution Bench to decide whether on the publication of an approved scheme the number of trips of the vehicles of the existing operators can be increased by granting the variation of a permit even when the existing operators are allowed to carry on their, business as on the date of the publication of the scheme. We, therefore, refer this case to a Constitution Bench. Since the matter is urgent and requires to be decided early it may be posted before the Constitution Bench for final hearing on the first Tuesday of February, 1990 subject to overnight part heard case.
Order accordingly.
For Citation AIR 1990 SC 412