Holding

A scheme under Chapter IVA that excludes private operators from a notified route bars them from operating on that segment, even with "corridor restrictions", unless the scheme itself contains a saving provision.

Summary

The appellants, holders of stage‑carriage permits, sought to operate their services over routes that were partially nationalised under Chapter IVA of the Motor Vehicles Act, 1939, by imposing "corridor restrictions" (i.e., not picking up or dropping passengers on the nationalised segment). The Supreme Court examined whether the definition of "route" and the scheme provisions under sections 68C, 68D and 68FF barred such operation. It held that once a scheme is published, it expressly prohibits any private operator from running on the notified area or route unless the scheme itself provides a saving clause, and the mere existence of a permit does not override the scheme. The Court emphasized that the public interest and the statutory hierarchy (section 68B) give overriding effect to Chapter IVA, and that any relief must be carved out in the scheme or by legislative amendment. Consequently, all appeals and special leave petitions were dismissed, and the interim orders allowing the appellants to operate on the notified routes were vacated.

Issues considered

The meaning of "route" under s.2(28A) of the Motor Vehicles Act, 1939.
Whether a private operator may ply a stage‑carriage over a nationalised (notified) segment of a route by observing "corridor restrictions".
The effect of a scheme prepared under s.68C‑68D on existing permits and the scope of the overriding provision in s.68B.
Whether the exclusion of private operators from notified routes violates Article 14 of the Constitution.

Legislation cited

Constitution of Indias. Article 14, s. Article 19(6)(ii)
Motor Vehicles Act, 1939s. 2(28A), s. 68B, s. 68C, s. 68D, s. 68E, s. 68F, s. 68FF
Uttar Pradesh Act No. 27 of 1976s. 5

Subjects

Motor Vehicles Actnationalisationcorridor restrictionsstage carriage permitroute definitionpublic interestscheme exclusionstate transport undertaking

Judgment

661

AllARSH TRAVELS BUS SERVICE & ANR,
v. A
STATE OF U.P. & ORS.

OCTOBER 17, 1985

[O. CHINNAPPA REDDY, E.S. VENKATARAMIAH, V.B. ERADI, R.B. MISRA
AND V. KHALID, JJ.j B

Motor Vehicles Act 1939: Sections 68B, 68C & 68D -
Nationalised or notified route - Right of private operator to
operate on co=n. over-lapping sector - Imposition of "Corridor
restrictions" - Permissibility of.

Scheme - Preparation and publishing of - Approving or ·
c
modifying of - Interest of travelling public -. Protection of -
Necessity.

Words & Phrases: "route" - Meaning of - Section 2(28A)
Motor Vehicles Act 1939.
D
The appellants in the appeals were holders of stage
carriage permits over certain intra-state routes as well as
inter-state routes. Parts of the routes on which they were plying
their stage carriages were notified under Chapter IVA of the
Motor Vehicles Act 1939. They contended that they may be
E
permitted to ply their stage carriages over the entire route by
imposing "corridor restrictions" i.e. not picking up or setting
down any passengers at any point on the nationalised part of the
routes.

In the appeals to this court the question was: where a
route is nationalised under Chapter IVA of the Motor Vehicles Act
F
1939 whether a private operator with a permit to ply a stage
carriage over another route but which has a cOlllllOn over-lapping
sector with the nationalised route can ply his vehicle over that
part of the over-lapping coDIDOn sector if he does not pick up or
set down passengers on the over-lapping part of the route.
G
On behslf of the appellants, it was contended that a
"route" according to the definition in section 2(28A) of the
Motor Vehicles Act 1939 meant a line drawn between two terminii
and if the portion of it had been nationalised, it would have no
effect whatsoever on the permits to ply stage carriages on the

H
662 SIJPRJ;ME COURT REPORTS [1985] SUPP.3 s.c.R.

A
route, and that the complete exclusion of private operators from
the COllllllOn sector would be violative of Article 14 and alao ultra
vires section 68-D of the Act. It was further conteuded that the
provisions of Chapter IV and Chapter IVA of the Act lllWlt be
construed in such a manner as to allow permit holders to ply
their stage carriages notwithatanding that parts of their route
ll
are also parts of notified routes.

Dismissing the appeals and special leave petitions,

llEIJl :l(a) None of the schemes contains any saving .clause
in favour of operators plying or wanting to ply stage carriages
on COlllllOn sec tore. However, there ia invariably a clause in the
c scheme to the effect that no person other than the State
Government Undertaking will be permitted to provide road
transport services on the routes specified in the scheme. In view
of this provision in the scheme there ia a total prohibition of
private operators from plying stage carriages on the uaole or
part of the notified routes, The appellants cannot therefore
contend thet they can ply their vehicles on the notified routea
D
or part of the notified routes. [678 G - 679 A]

(b) When preparing and publishing the scheme under section
68-C and approving or modifying the scheme under aection 68-D
care must be taken to protect, aa far as posaible, the interest
of the travelling public who could in the past travel from one
E
point to another without having to change from one service to
another enroute. This can always be done by appropriate clauses
exeniptiDg operators already having permits over the ccamon sector
from the scheme and by incorporating appropriate conditional
clauses in the scheme to enable them to ply their vabiclea over
cOllEOll sectors without pick.illjl up or setting dOIJll paaaengera on
F the COlllDOn sectors. If such a course is not feasible the State
Legislature may intervene and provide some other alternative,
[667 F-HJ

2, The right of the 1118111bere of the public to paaa and
re-pass over a highway including the right to use motor vehicles
G on the public road meted prior to the enactment of the Motor
Vehicles Act, 1939 and Willi not its creation. 1he State could
control and regulate the right for the purpose of enauri11& the
safety, peace and good health of the public. As an incident of
this right of paaaage over a highway, a lllelllber of the public was
entitled to ply motor vehicles for pleasure or pastime or for the
H purpose of trade and busine1• subject to permiaaible control and
regulation by the State. (666 G - 667A]
ADARSH TRAVELS v, STATE 663

~ All!Ol!d v. State of u.P., [1955] l s.c.R 707, referred A
to.

3. Chapter IVA of the Motor Vehicles Act 1939 was bodily
introduced by Amending Act No. 100 of 1956 to provide for the
nationalisation of roed transport services. Section 68-B gives
over-riding effect to the provisions of Chapter IVA and the rules II
and orders made thereunder over the provisions of Chapter IV and
any other law for the time being in force. [667 E; 668 BJ

4. While the provisions of Chapter IVA are devised to
over-ride the provisions of Chapter IV and it is expressly so
enacted, the provisions of Chapter IVA are clear and c~lete c
regardio.g the manner and the effect of the take over of the
operation of a road tranaport service by the State Transport
Undertaking in relation to any ares or road or operation thereof.
The initial requirement of the initiation of a scheme is that the
State Transport Authority must think it necessary in the public
interest to provide sufficieot, adeqU11te, economical and properly D
~rdinsted State Tra!lBport service in relation to any area or
route or portion thereof to the exclusion, complete or partial or
other persons or otherwise. Even at . this stage, the State
Transport Undertaking is required to apply its mind to the
question of complete or partial exclusion of other persons or
otherwise for operating transport services. Thereafter objections E
to the scheme are to be heard. All existing operators providing
transport facilities along or near the area or the route proposed
to be covered by the scheme are to be heard. Any operator who is
likely to be affected by total or partial exclusion can thua,
object to the sche<ne and suggest such modifications as m&y
protect him. A hearing is required to be given and the hearing is
no empty fomality. Even thereafter, the State Transport F
Undertaking ae well as the State Government are empowered to
cancel or tJOdify the scheme under section 68E. Therefore, if in
the actual working of the approved scheme any d1.fficulty or
hardship is experienced by the public or by other operators such
difficul.ty may be removed and hardship relieved by appropriate
action under section 68E. Both section 68F and the proviao to G
section 68FF provide for the iasue of temporary permits to
private operators if the State Transport Undert:U.!.ng hlUI not
applied for a permit tempor.ary or otherwise in respect of a
scheme published or approved. At every stage, abuDdant proviaion
is thus, ID8de to protect the public interest as also the interest
of private operators by providing for conaideration and
re-consideration of any problems that m&y arise out of a H
proposed, published or approved scheme· It is in this contut
that section 68-C aiid 68-tili wet be construed. [671 C - 672 B]
664 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

A
5. A careful and diligent perusal of sections 68-C, 68-D(3)
and 68-FF in the light of the definition of the expression
"route" in section 2(28A) appears to make it manifestly clear
that once a scheme ·is published under section 68-D in relation to
any area or route or portion thereof, whether to the exclusion,
complete or partial of other persons or otherwise, no person
B
other than the State Transport Undertaking may operate on the
notified area or notified route except as provided in the schelle
itself. A necessary consequence of these provisions is that no
private operator can operate his vehicles on any part or portion
of a notified area or notified route unless authorised so to do
by the terms of the terms of the scheme itself. He 1111y not
operate on any part or portion of the notified route or area on
c the mere ground that the permit as originally granted to him
covered the notified route or area. (672 C-E]

6. It is 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 that not mis-utilised since it is next to nigh
D
impossible to keep a proper check at every point of the route.
Often times, permits for plying stage carriages from a point a
short distance beyond one terminus to a point at 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
E
frustrate the scheme. If indeed there is any need for protecting
the travelling public from inconvenience, the State Transport
Undertaking and the government will have to make sufficient
provision in the scheme itself to avoid inconvenience being
caused to the travelling public. (672 H - 673C]
F
llaa Sanebi SiDgb. v. llibar State Road Transport Corporaticm.
(1971] 3 S.C.C. 797; Nflkpntha Pr&IJ8d ' Orso Y• State of llihar
(1962] Supp. 1 $.C.R. 728; C.P.C. ltotor Service lfyaore Y• !be
State of llyaore & Another (1962] Supp. 1 s.c.R. 717; s. Abdul
lbader Sabel> v. llyaore lleveuue Appellate Tribunal Banplote '
Ors., (1973] 1 s.c.c. 357, referred to.
G
llyaore State Road Tranaport Corporation v. llyaore lleftJllle
Appellate Tribunal (1975] 1 S.C.R. 615, approved.

llysore State Road 'Iransport Corporation v. !be lfyaore
llevewe Appellate Tribunal (1975] 1 s.C.R. 493, over-ruled.
H
CIVIL APPELLA'.l:,; JURISDICTION : Civil Appeal No. 1021 of
1976 etc.
AIJARSH TKAVELS v. STATE [CHINNAPPA REDDY, J.] 665
A
From the Judgment and Order ciated 10.8.1976 of the
Allahabad High Court in Special Appeal No. 248 of 1973.

J.P. Goyal, R.K. liarg, Yogeshwar Prasad, S.N. Kacker, O.P.
Rana,K.K. Venugopal, Rajesh, V.K. Verma, Suman Kapoor, R,K, Jain,
R.P. Singh, R.A. Sharma, S.K, Jain, Mrs. Ran.!. Chhabra, S,R, B
Srivastave, R.B, Mehrotra, Mrs. c. Markandeya, Raju llamachandran,
P.K, Pillai, Raj Narain Munshi, Sudhansu Atreya, Gopal Subri:i-
maniam, Mrs. Shobha Vik.shit, S.K. Bisaria, B.D. Sharma, s.c.
Birla and B.P. Maheshwari for the appearing parties.

The Judgment of the Court was delivered by c
CllINNAPPA REDDY, J, These appeals have been placed before
us primarily to resolve a conflict between Ram Sanebi Singh v.
Bihar State Boad Transport Corporation [1971] 3 s.c.c. 797,
19"eore State Boad Transport Corporation v. 19'eore Revenue
Appellate Tribunal and Others [1975] l s.c.R. 493, . and 19'eore D
State Boad Transport Corporation v. 19"eore Revenue Appellate
Tribunal and Others [1975] l s.c.R. 615. 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
cOl!lllOn overlapping sector with the nationalised route can ply his E
vehicle over that part of the overlapping cOIIllllOn 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.

We will mention here the facts of a few cases which are F
illustrative of the question raised. In Civil Appeal No. 684 of
1981, the appellants hold a stage carriage permit over the route
Meerut to Ambala via Bamanheri, Deoband, Gagalheri and
Saharanpur. One part of the route, namely Meerut to Bamanheri is
also part of a nationalised route Meerut-llamanheri-Hardwar while
yet another part of the route, namely, liagalheri to Saharanpur is G
part of another nationalised route Hardwar-Dehradun-Gagalheri-
Saharanpur. The question has arisen whether the petitioners may
be allowed to ply their stage carriage over the whole of the
route Meerut-Bamanheri-Deoband-Gagalheri-Saharanpur-Ambala provi-
ded that they observe 'corridor restrictions', that is, provided
they do not pick up or set down any passengers between Meerut and
Bamanheri and between Gagalheri and Saharanpur. In Civil Appeal H
Nos. 1909 and 1910 of 1981, the appellants were applicants for
666 SUPREME COURT REPORTS (1985] SUPP.3 S.C.R.

A the grant of etage carriage permits over the route Etah-Dh11111ar1-
Sidhupur-Patiyal1. The route Eta.'i-Dhumari-Daryaganj-Qaimganj
had already been notified under ·Chapter IV-.\ of the Motor
Vehicles Act. As part of the route over which the appellants
applied for permits to ply stage carriages had already been noti-
fied under Chapter IVA of the Motor Vehicles Act, their applica-
B tions for the grant of permits were rejected. They claimed that
they should have been granted permits by imposing "corridor
restrictions" over that part of the route which had been noti-
fied. In Civil Appeal No. 1021 of 1976, the appellant held a
permit for plying a stage carriage over the inter-state route,
Allahabad to Rewr.. The permit is said to have been granted in
favour of another individual, orig!.nally, under an inter-state
c agreement between the State of Uttar Pradesh and Madhya Pradesh.
On the failure of the original permit-holder to obtain a renewal
of the permit he lost the permit and it was thereafter grllllted to
the appellant. Part of the route between Allahabad and Chakghat
via Panari was nationalised by the Uttar Pradesh Government. The
whole of the route Rewa to Allahabad was nationalised by the
Madhya Pradesh Govermnent with the concurrence of the Central
D Government, but with exemptions in favour of the existing
operators plying under inter-state agreements, though the matter
has not been made very clear to us. The appellant clailll8 that
notwithstanding the nationalisation of the route from Allahabad
to Chakghat, he is entitled to ply that stage carriage over that
part of the route also by observing "corridor restrictions", In
E Civil Appeal No. 2921 of 1981, the State of Rajasthan has
nationalised part of an inter-state route and the complaint is
that the appellant should have been permitted to ply his stage
carriage over the entire route with "corridor reatrictiona" over
the nationalised part of the route. In Civil Appeal Noa. 164-166
of 1982, the complaint is that a very insignificant portion of
F the route on which the appellants hold stage carriage permit• ia
included in a nationslis~d route and therefore, the scheme 1bould
have exempted the operation of private state carriage• over the
comnon sector.
The right of the members of the public to pass and re-pua
G over a highway including the right to use motor vehicles on the
public road existed prior to the enactment of the Motor Vehicle•
Act and was not its creation. The State co.uld control and
regulate the right for the purpose of ensuring the safety, peace
and good health of the public• As an incident of hi1 right of
p11Ssage over a highway, a . member of the public was entitled to
H ply motor vehicles for pleasure or pastime or for the p~lti of
AllARSH TRAVELS v. STATE [CHINNAPPA REDDY, J.] 667

trade and business, subject, of course, to permissible control A
and regulation by the State, Sagbir Alimed v. State of U.P.,
[1955] l s.c.R. 707. Under Article 19(6)(ii) of the Constitution>
the. State can make a law relating to the carrying on by the State
or by a Corporation, owned or controlled by the State of any
particular business, industry or service whether to the
exclusion, complete or partial, of citizens or otherwise. The law B
could provide for carrying on a service to the total exclusion of
all the citizens; it may exclude some of the citizens only; it
may do business in the entire State or a portion of the State, in
a specified route or part thereof. The word 'service' has been
construed to be wide enough to take in not only the general motor
service, but also the species of motor service. There are no C
limitations on the State's power ·to make laws, conferring mono-
poly on it in respect of an area, and person or persons to be
excluded, Iondala Rao v. A.P. State Road Transport Corporatioll,
A.I.R. [1961] S.C. 82. All this is now well established by the
various decisions of .this court.
D
Chapter IVA of the Motor Vehicles Act provides for the
nationalisation of road transport services in the maruler
prescribed therein. No question of the vires of any provision of
Chapter IVA on any ground has been raised before us. Chapter IVA
of the Motor Vehicles Act was bodily introduced into it by
Amending Act No.100 of 1956. It· further underwent substantial E
amendments by Act 56 of 69 of 1970 which came into effect on
March 2, 1970. We may mention here s.2(28A) defining 'route' was
also introduced by Act 56 of 69. 'Route 1 was defined as meaning
1
a line of travel which specifies the highway which may be
traversed by a motor vehicle between one terminus and another.
The introduction of s. 2(28A) defining the expression 'route'
appears to have been necessitated to dispel the confusion conse- F
quent upon the seeming acceptance by this Court in N1 lkentha
Prasad and Otbera v. State of B1har, [1962] Supp. ·1 s.c.R. 728 of
the suggested difference between 'route' and 'highway' by the
Privy Cowicil in Ielalli Valley llotor Transit Co. Ltd., v. Colombo
Hatnapura Qmibus Co. Ltd., 1946 A.c. 338 where it was said, "A
"highway" is the physical track along which an omnibus runs, G
whilst a "route" appears to their Lordships to be an abstract
conception of line of travel between one terminus and another,
and to be something distinct from the highway traversed •••••••
there may be alternative roads leading from one terminus to
another but that does not make the route any highway the same."
The present defintion of route makes it a physical reality in-
stead of an abstract conception and no longer makes it something
_ _ H_'_' ...Ii
668 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

A distinct from the highway traversed. Getting .back to the highway
and Chapter IVA, ·We first notice s.68-A(a) which defines "road
transport service" to mean " a service of 100tor vehicles
carrying passengers or goods or both by road for hire or reward."
Next, and this is important, s. 68-B gives over-riding effect to
the provisions of Chapter IVA and the rules and orders made
B thereunder over the provisions of Chapter IV and any other law
for the time being in force. Section 68-C provides for the
'preparation and publication of scheme of road transport service
of a State Transport Undertaking'. Since the answer to the
question raised turns primarily on the interpretation of sec.
68-C, it is desirable to extract the same. It is as follows :
c "68-C. Where any State Transport Undertaking is of
opinion that for the purpose of providing an eff i-
cient, adequate, econanical and properly co-ordinat-
ed road transport service, it is necessary in the
public interest tbat road transport services in
general or any particular class of such service in
relation to any area or route or portion thereof
D 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 sball cause every such scheme to be
published in the Official Gazette and also in such
other manner as the State Government may direct."

The policy of the legislature is clear from s.68-C tbat the State
F 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
G 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· The scheme has to be published
in the Official Gazette as well as in any other manner tbat the
State Government may direct. The object of publishing this scheme
H is to invite objections to the scheme. Section 68-D enables (i)
AllARSH TRAVELS v. STATE [Cl!INNAPPA REDDY, J.] 669

A
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) an1 local authority or
police authority within whose jurisdiction any part of the area B
or route proposed to be covered by ,the scheme lies to file
objectiona to the scheme before the State Government within 30
days from the date of its publication in the Official Gazette.
Clause 2 of sec. 68-ll empowers the State Government to consider
the objections, give an opportunity to the objector or ·his
representatives and the representatives of the State Transport c
Undertaking to be heard in the matter' if they so desire and
approve or modify the scheme. Clause 3 of sec. 68-ll requires the
scheme as approved or modified to be published in the Official
Gazette whereupon the scheme becomes final and shall thereafter
be called an approved scheme. There is a proviso to clause 3
which provides that no scheme which relates to any inter-state o
route shall be deemed to be an approved scheme unless it has been
published with the previous approval of the Central Government.
Section 68-£ enables the State Transport Undertaking to cancel or
modify any scheme published under ss. 68-1>(3) after following the
procedure laid down in sec. 68-<; and sec. 68-D in respect of
certain matters, such as, the increase in the number of vehicles E
or the number of trips, change in the type of vehicles without
reducing the sitting capacity, extension of the route or area
without reducing the frequency of the service, alteration of the
time-table without reducing the frequency of the service. The
State Transport Undertaking need not follow the procedure laid
down in sec. 68-<; and sec. 68-IJ if the previous approval of the
State Government is obtained and if the scheme is one relating to F
any route or area in respect of which the road transport services
are to be run and operated by the State Transport Undertaking to
the complete exclusion of other persons. Section 68-E, sub-sec.2
enables the State Government, at any time, if it considers
necessary in the public interest so to do, to modify a scneme
published under sec. 68-1>(3) after giving an opportunity of being G
heard to the State Transport Undertaking and any other person who
in the opinion of the State Government is likely to be affected
by the proposed modification. Section 68-F(l) obliges the
l<egional Transport Authority or the State Transport Authority, as
the case may be, to grant to the State Transport Undertaking the
necessary permits on its applying for the same in pursuance of an
approved scheme. The permits have to be issued notwithstanding H
anything to the contrary in Chapter IV. Section 68-F(l-A) obliges
670 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

A the State Transport Authority or the Regional Transport as the
case may be, to issue temporary permits to the State Transport
Undertaking, for the period intervening between the date of
publication of the scheme and the date of publication of the
approved or modified scheme. The State Transport Authority or the
Regional Transport Authority must, however, be satisfied that it
B is necessary in the public interest to increase the number of
vehicles operating in such area or route or portion thereof
previously.

Section 68-F(l-C) enables the State Transport Authority or the
Regional Transport Authority, as the case may be, to grant to
private operators temporary permits if no application for a
c temporary permit is made under sub-sec.(1-A) in respect of the
area or route or portion thereof specified in the scheme. Section
68-F(l-D) prohibits the grant or renewal of a permit, save as
otherwise provided in sub-sec.(1-A) and sub-sec.(1-C) during the
period intervening between t\!_e date of publication of any scheme
and the date or publication of the approved or modified scheme.
Sub-sec.2 of sec.68-F enables the State Transport Authority the
o Regional Transport Authority as the case may be, for the purpose
of giving effect to the approved scheme in respect of a notified
area or notified route, to refuse to entertain any application
for the grant or renewal of any permit or reject any such appli-
cation as may be pending, to cancel any existing permit, and to
modify the terms of any existing permit so as to render .the
E permit ineffective. beyond a specified date, to reduce the number
of vehicles authorised to be used under the permit and to curtail
the area or route covered by the permit in so far as such permit
relates to the notified area or notified route. Section 68-FF
prohibits ·the grant of any permit except in accordance with a
provision of the scheme, once a scheme has been published under
F sec.68-D(3) in respect of any notified area or notified route.
This is an important provision and we may extract it' here. It is
as follows:

"68-FF -
''Where a scheme has been published under sub-section 3
G of sec.68-D in respect of any notified area or
notified route, the State Transport Authority or the
Regional Transport Authority, as the case may be,
shall not grant any permit except in accordance with
the provisions of the scheme."

H There is, however, a proviso which enables the grant of a
temporary permit to any person in respect of such notified area
ADARSH TRAVELS v. STATE [CHINNAPPA REDDY, J.] 671

or notified route if no application for a permit has been made by A
the State Transport Undertaking. Section 68-G and 68-H prescribe
the principles and method of de.termining compensation and its
payment to the holders of existing permits which cancelled or
modified. Section 68-I empowers the State Goventment to make
rules for the purpose of carrying into effect the provisions of
the Chapter and in particular in accordance with the various B
matters specified in sub-sec.2.

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 C
the operation of a road transport service by the State Transport
Undertaking in relation to any area or route or portion thereof.
While on the one hand, the paramount consideration is the public
interest, the interest of the existing operators are sufficiently
well-taken care of and such slight inconveniences to the
travelling public as may be inevitable are sought to be reduced D
to a minimum. To begin with the State Transport Undertaking must
think it necessary in the public interest to provide efficient,
adequate, economical and properly co-ordinated State Transport
ser-Vices in relatio11 to any area or route or portion thereof, to
.the exclusion complete or partial of other persons or otherwise.
This is the initial requirement for the initiation of a scheme. E
Even at that stage, the State Transport Undertaking is required
to apply its mind to the question of complete or partial
exclusion of other persons or otherwise from operating transport
services in relation to any area or route or portion thereof.
There is ample and sufficient guidance to the State Transport
Undertaking for the application of n.ind. 1hereafter objections to
the scheme are to be heard. All existing operators providing F
transport facilities along or near the area or the route proposed
to be covered by the scheme are to be heard. Therefore) it will
be open to any operator who is likely to be affected by total or
partial exclusion to object to the scheme and suggest such
modification as may protect him. A hearing is required to be
given and the hea;:-ing is no empty formality as decisions of this G
court have shownG Even that is not an end of the matter. Even
thereafter, tne State Transport Undertaking as well as the State
Goverlliilent are empowered to cancel or modify the scheme under
sec.68-E. In other words, if in the actual working of the
approved scheme any difficulty or hardship is experienced by the
public er for that matter by other operators, such difficulty may
a... be removed and hardship relieved by appropriate action under H
672 SUPREME COURT REPORTS (1985] SUPP.3 s.c.R.

A section 68-E. Both sec.68F and the proviso to sec.68-FF provide
for the issue of temporary permits to private operators if the
State Transport Undertaking has not applied for a permit
temporary or otherwise in respect of scheme published or
approved. We thus find that at every stage, abundant provision
is made to protect the public interest as also the interest of
B private operators by providing for consideration and re-consi-
deration of any problems that may arise out of a proposed,
published or approved scheme. It is in that context, .we lllll8t
construe sec.68-C and sec.68Hll both of which provisions have been
extracted by us earlier.

A careful and diligent perusal of sec.68-c, sec.68-ll{3) and
c 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-ll 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
D 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
E area. We are not impressed by the various submissions made on
behalf of the appellants by their several counsel. The foremost
argument was that based on the great inconvenience which may be
caused to the travelling public if a passenger is not allowed to
travel, say, straight from A to B on a stage carriage, to ply
which on the route A 'o B a person X has a permit, merely because
F a part of the route from C to D somewhere between the points A
and B is part of a notified route. The answer to the question is
that this is a factor which will necessarily be taken into
consideration by the State Transport Undertaking before
publishing the scheme under sec.68-C, by the Government under
sec.68-ll when considering the objections to the scheme and
G thereafter either by the State Transport Undertaking or by .the
Government when the inconveniences experienced by the travelling
public are brought to their notice. The question is one of
weighing in the balance the advantages conferred on the public by
the nationalisation of the route C~ against the inconveniences
suffered by the public wanting to travel straight from A to B. On
H the other hand, it is quite well known that under tne guise of '
ADARSH TRAVELS v. STATE [CHINNAPPA REDDY, J, J 673

the so called 'corridor restrictions' permits over longer routes A
which cover shorter notified routes or 'overlapping' parts of
notified routes are more of ten then not misutilised since it is
next nigh impossible to keep a proper check at every point of tha
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 B
route have been applied for and granted subject to the so-called
"corridor reetr1ctiona" which are but more ruses or trap• to
obtain permits and to frustrate.the scheme. If indeed there i•
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 c
sufficient provision in the scheme itself to avoid inconvenience
being caused to the travelling public.

One of the submissions urged wea that s route, according to
definition, meant a line drawn between two termini! and,
therefore, route AB cannot be the same route as CD even if C &D D
happened to be two points on the highway from A to B. lt vu
argued that if route AB wea different .from route CD, the
nationalisation of route CD had no effect whatsoever on th•
permits to ply stage carriages on the route AB. Thia argument 19
specious and is only to be stated to be rejected. ln fact,
whatever argument was open to the learned counsel on the baaio of I!
the decision of the PrivY Council in KelaDi Vallay llotor r - i t
Co.Ltd• v. Col mt a llet:Depuza Claaibua Co.Ltd. (aupra) la ao longer
open to them in view of the definition of route insertlld aa
sec.2(28-A) of the Motor Vehicles Act by the .Amendi11& Act of
1969. We do not have the slightest doubt that route AB covers and
includes every part of the particular highway from A to B
traversed by the Motor vehicle along the route. It is impoasible p
to accept the argument that only the termini! have to be looked
at and the rest of the highway ignored in order to diacover 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 cOlllDOn sector he
cannot be said to be plying s state carriage between those two G
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. Another argument which was advanced and which is alao
lacking in substance is that s complete exclusion of private
operators from the common sector would be violative of Art.14 snd
that it would be ultra vires sec. &8-D. We ere unable to see how ll
either Art.14 or sec.68-ll of the Motor Vehicles Act hit s scheme
674 SUPREME COURT REPORTS [1985) SUPP.3 s.c.a.

A
which provides for complete exclusion of private operators from
the whole or any part of the notified area. Almost all these
submissions have been considered and met by the majority judgment
in ltysore State Road Transport CorporatioD v. llyaore llevelllle
Appellate Tribunal., [1975] l s.c.R. 615, to which we shall
presently refer.
II
In C.P.C. Motor Senice, ltysore V• The State of Mysore &
Anr., [1962) Supp. l s.c.R. 717, the impugned scheme provided for
taking over certain stage carriage services to the complete
exclusion of private operators. It provided:

"The State Transport Undertaking will operate services
C to the complete exclusion of other persons (i) on all
the notified inter-district routes except in regard to
the portions of inter-district routes lying outside
the limits of Mysore District, and also (ii) over the
entire length of each of the inter-district route
lying within the limits of Mysore Distri~t."

lJ Certain persons who possessed stage carriage permits to ply
vehicles on inter-district and inter-state routes which
overlapped the Mysore District challenged the scheme and
contended that their permits should not be affected merely
because parts of the routes were within the Mysore District.
Their contention was that since· the terminii of the routes on
i;; which they were operating vehicles were outside Mysore District
it could not properly be said that any portion of their route had
been taken over merely because it lay within the Mysore District.
It was held by this court that a route meant not only the
notional line b>;t also the actual road over which the motor
vehicles ran and in view of the fact that the scheme reserved all
F the routes within the Mysore District to the State Transport
Undertaking, no private operator could be allowed to ply his
vehicle on the common sector which was within the Mysore
District. His route automatically steel pro tanto cut down co only
that portion which lay outside the Mysore District.

G Even before the introduction of the definition of route in
sec. 2(28-A) by the 1969 amendment, in NilaJcanth Prasad and
Otbera v. State of lU.har (supra) , the court unders toad the wurd
'route' on practically the same lines with reference to sec. 68-C
and sec. 68-F. The court said,

H "This means that even in thGse cases where the
AllARSH TRAVELS v. STATE [CHINNAPPA REDDY, J.] 675

notified route and the route applied for run over a A
cOl!lllOn sector, the curtailment by virtue of the
notified scheme would be by excluding that portion of
the route or, in other liiC>Ids, the "road" common to
both. The distinction between "route" as the physical
tra<;k disappears in the working of Chapter IVA,
because you cannot curtail the route without B
curtailing a portion of the road, and the ruling of
the Court to which we have referred, would also show
that even if the route was different, the area at
least would be the same. The ruling of the Judicial
Committee cannot be made applicable to the Motor
Vehicles Act, particularly Chapter IV-11, where the c
intention is to exclude private operators completely
from nm.ning over certain sectors or roO:tes vested in
State Transport Undertakings. In our opinion, there-
fore, the appellants were rightly held to be disen-
titled to run over those portions of their routes
which were notified as part of the scheme. Those D
portions cannot be said to be different routes, but
nrust be regarded as portions of the routes of the
private operators from which the private operators
stood excluded under s. b8-F(2)(c)(iii) of the Act."

In Ram Sanehi SiDgh v. Bihar State Road Transport E
Corporation & Ors. (supra), there was a slight note of
discordance. The appellant there possessed a permit to ply a
stage carriage on a route which had a coDJDOn sector of five miles
of a notified route. On the examination of the scheme, the Court
found that there was nothing in. the notified. scheme which
"completely excluded" the other holders of permits from plying
their stage carriages in pursusnce of permits issued to them from F
terminii not on points on the notified route. It was held that
merely because the appellant had to run his vehicle on a part of
the notified route without the right to pick up passengers or to
drop them, his permit to the extent of the overlapping portion
could be said to be ineffective. We are afraid that this decision
IlRlSt be confined to its own facts. The learned judges did not G
notice the earlier decision of the court in CfC llator Services,
Mysore v. 'lbe State of Mysore and Anr. (supra) and Neelkanth
Pnsad and Ors. v. 'lbe State of B1bar (supra). They also failed
to notice that while sec. 68-<; provides for preparation and
publication of scheme giving particulars of the services proposed
to be run and operated by the State Transport Undertaking in
relation to any area or route to the exclusion, complete or H
676 SUPREME COURT REPORTS (1985) SUPP.3 s.c.R.

A
partial, of other persons or otherwise. Section 68-FF alao debars
the State Transport Authority and the Regional Transport
Authority from granting any permit except in accordance with the
provisions of the scheme.

B In S, Abdul l<bader Sabeb v, 'Die ltylore Rnemie Appellate
Tribunal, lknplore & On. (1973) 1 s.c.c, 357, the court
approved the view of the High Court of Karnataka that,

"when once on a route or a portion of the route there
hes been total exclusion of operation of etqe
carriage services by operators other than the State
c Transport Undertaking by virtue of a clauae in an
approved scheme, the authorities granting permit under
Chapter IV of the Motor Vehicles Act, should refrain
from granting a permit contrary to the acheme."

In ltylore State llold Transport Corporation v. l'be ltylore a.-
Appellate Tribunal (1975) 1 s.c.R. 493, Beg and Chandrachud JJ,
D departing from the views generally taken till then, took the
view that a scheme which totally excluded inter-1tate private
operators from using any part of a notified route 11111t make the
intention clear. There wae a difference between area and route.
Route denoted the abstract conception of line of travel• A
difference in the two terminii of two route• would make the two
E routes different even if there wa1 overlapping. Unlaas the scheme
clearly indicated that the user of any portion of the highway
covered by the notified route was prohibited, inter-atata
operators could not .be debarred from plying their vehiclH over
the overlapping part of the inter-state route merely becauae of
the physical fact of the overlapping of the two routes. The
F learned judges did not notice the earlier decisions of the court
in c.P.c. Motor Senic:e, llJaore v. 'Die State of lfJaore & Anr.
(supra) and Abdul lbader v. 'Die ltylore Revenue Appellate Tribaaal
(supra). Nillranth Praaad's (supra) case was noticed but bY'"P8s&ed
with the observation "whatever may be said about the correctness
of the decision" etc.
G
In llJaore State Road Trauport Corporation v• ltylore State
Transport Appel.late Tribunal (1975) 1 s.c.R. 615, all the earlier
cases were noticed and it was held,
"It is, therefore apparent that where a private
H transport owner makes an application to operate on a
route, which overlaps even a portion of the notified
AlJARSH THAVELS V• STATE [CHINNAPPA RlillDY, J.] 677

route i.e. where the part of the highway to be used by
A
the private transport owner traverses on a line on the
same highway on the notified route, then that
application has to be considered only in the light of
the scheme as notified. If any conditions are placed
then those conditions have to be fulfilled and if
there is a total prohibition then the application must
B
be rejected ..•• ·· •..••••••...••.•...••••..•••••. , •••
o o o 0 0 0 0 o o o 0 0 0 0 0 o o o o 0 0 0 o o o 0 0 0 0 0 o o 0 0 0 0 I o o o

This Court has consistently taken the view that if
there is prohibition to operate on a notified route or
routes no licences can be granted to any private
operator whose route traversed or overlapped any part
c
or whole of that notified route. The intersection of
the notified route may not, in our view, amount to
traversing or overlapping the route because· the
prohibition imposed applied to a whole or part of the
route on the 1lichWC1.J on th<= O;;w...t! .liue ut the route. ~
D
intersection cannot be said to be traversing the same
line, as it cuts across it."

The learned judges expressly di.ssented from the decision of Beg
and Chandrachud, JJ. in !fysore State Transport Corporation v.
llysore Revenue Appellate Trlbullal [1975] 1 s.c.R. 493, and
E
approved the decisions of the court in N1lkanth Prasad's case
(supra) and Abdul Khader's case (supra). We agree with the view
taken by this court in Mysore State load Transport Corporation v.
Mysore Revenue Appellate Trlbullal [1975] 1 s.c.R. 615, and
dissent from the view taken in llysore State Road Transport
Corporation v. Die Mysore lleveDue Appe11 ate Trlbuoal [1975] 1
S.C.R. 493. We however wi.sh to introduce a note of caution. When F
preparing and publishing the scheme under s. 68-C and approving
or modifying the scheme under s .68-D care must be taken to
protect, as far as possible, the interest of the travelling
public who could in the past travel from one point to another
without having to change from one service to another enroute.
This can always be done by appropriate clauses exempting G
operators already having permits over common sector from the
scheme and by incorporating appropriate conditional clauses in
the scheme to enable them to ply their vehicles over common
sectors without picking up or setting down passengers on the
connnon sectors. If au.Ch a course is not feasible the Stat.e Legis-
lature may intervene and provide some other alternative as was
done by the Uttar Pradesh Legislature by the enactment of the H
678 SUPREME COURT REPORTS [1985] SUPP.3 s.c.R.

A Uttar Pradesh Act No. 27 of 76 by sec. 5 of which the competent
authority could authorise the holder of a permit of a stage
carriage to ply his stage carriage on a portion of a notified
route subject to terms and conditions including payment of
licence fee. There may be other methods of not inconveniencing
through passengers but that is entirely a matter for the State
B Legislature, the State Government and the State Transport Under-
taking. But we do wish to emphasise that good and sufficient care
must be taken to see that the travelling public is not to be
needlessly inconvenienced.

Shri R.K. Garg urged that the provisions of Chapter IV and
Chapter IV-A must be reconciled in such a manner. as to allow
c permit holders to ply their stage carriages notwithstanding that
parts of their route are also parts of notified routes. lie fail
to understand the argument having regard to the express legis-
lative pronouncement in s. 68-B that the provisions of Chapter
IV-A and the rules and orders made thereunder shall have effect
notwithstanding anything inconsistent therewith contained in
Chapter IV of the Act.
D
In one of the cases it was argued before us that though the
scheme framed by the Uttar Pradesh Transport Undertaking
prohibited the plying of private stage carriages on the notified
part of an inter-state. route within the State of Uttar Pradesh·, a
later Madhya Pradesh Scheme published by the Madhya Pradesh State
E Transport Undertaking pursuant to an inter-state agreement
allowed the plying of stage carriages by private operators on
that part of the route which was in Uttar Pradesh also. The argu-
ment was that the later scheme superseded the earlier scheme and
therefore the operators could ply their vehicles on the Uttar
Pradesh part of the route also. We are unable to see oow the
F
scheme framed by the Uttar Pradesh State Transport Undertaking
can be superseded by the scheme framed by the Madhya Pradesh
State Transport Undertaking.

We are therefore unable to see any merit in any of the Civil
Appeals since none of the schemes placed before us contain any
G saving clause in favour of operators plying or wanting to ply
stage carriages on common sectors. On the other hand we found
that invariably there is a clause to tile following effect : "No
person other than the State Government Undertaking will be
perm! tted to provide road transport services on the routes
specified in paragraph 2 or any part thereof". In the face of a
H
provision of this nature in the scheme totally prohibiting
ADARSH TRAVELS v. STATE [CHINNAPPA REDDY, J.] 679

private operators from plying stage carriages on a whole or part A
of the notified routes, it is futile to contend that sny of the
appellants can claim to ply their vehicles on the notified routes
or part of the notified routes. All the appeals and Sepcial Leave
Petitions are therefore dismissed, with costs which we quantify
at Rs.2,500 in each. All the interim orders of this court which
enabled the appellants to operate their vehicles on notified
routes or part of notified routes or which enabled the appellants B
to apply for' and obtain penrits to so operate, with or without
the so-called corridor restrictions are hereby vacated.

N.V.K. Appeals and Petitions dismissed.