ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION, HYDERABADBADversusG.T. VENKATASWAMY REDDY AND ORS.

A            ANDHRA PRADESH STATE ROAD TRANSPORT
                    CORPORATION, HYDERABAD
                              v.
               G.T. VENKATASWAMY REDDY AND ORS.

                                AUGUST 24, 1992
B
            [V. RAMASWAMI AND YOGESHWAR DAYAL, JJ.]

          Motor Vehicles Act, 1939:

C        Proviso to Section 68-D(3/-Draft schem,._Terminii of the notified
  route falling within the State-Portion of the route overlapping inter-State
  rout,._Allowing existing pennit holders to operate on inter State routes over-
  lapping the notified route subject to corridor restriction-Validity of-Whether
  deemed to be an approved intra State Schem,._Approval of Central Govern-
  ment-Whether required-Objections of operators heard on draft schem,._
D Not heard on the exemption-Whether amounts to violation of principles of
  Natural Justice.

          Constitution of India, 1950:

          Article 14-Draft Scheme under section 68-D of Motor Vehicles Ac~
E
    1939-Notified route overlapping inter-State routes-Saving clause imposing
    corridor restriction-Whether discriminatory and violative of

        The appellant-Corporation published a draft scheme relating to an
  intra-State route. The scheme envisaged the exclusion of all other
F operators on the route with certain exceptions. Respondent No.I who was
  operating an inter-state carriage in the route, a portion of which was
  covered by the notified scheme and thus overlapping, filed his objections.
  The dralt scheme was approved with some modifications. Clause 4 of the
  Note appended to the approved scheme allowed the permit holders of stage
G carriages on the inter-State routes overlapping the notified route to run
  the route snbject to 'corridor restriction' viz., they should not pick up or
  set do"n intra- state passengers on the notified area.

        Respondent No.I filed a Writ Petition before the High Court chal-
  lenging the validity of clause (4) on the ground that it fell outside the
H competence of the State Government under section 68D(2) of the Motor
                                          4
                        S.R.T.C. v. G.T.V. REDDY                           5

Vehicles Act, I939; and that it was violative of Article I4 of the constitution A
of India. A Single Judge of the High Court quashed a portion of the
condition contained in clause (4) viz. picking up or setting down intra-state
pas.sengers on the route. It was also held that the notified scheme was
opposed to the principles of Natural Justice since no opportunity was
afforded to the objectors. The appeal preferred by the appellant was
                                                                                B
dismissed by the Division Bench. Aggrieved against the said order, the
appellant-Corporation preferred the present appeal.

       The Respondents contested the appeal on the ground that the 'cor-
ridor restrictions' contained the clause (4) of the Note did not find a place
in the draft scheme, and as they were not heard on this point, there was        C
violation of principles of Natural Justice. Violation of Article I4 of the
Constitution was also alleged.

      Allowing the appeal, this Court,

      HELD: I. It cannot be said that there was discrimination nndor D
Article I4 of the Constitution of India inasmuch as the scheme permitted
certain private operators in certain overlapping routes being given free
permission to operate whereas Respondent No.I who operates inter-State
stage carriage service is being subjected to 'corridor restrictions'. This
point was not urged before the the Courts below. However, it is not pointed     E
out how the various routes are similar to each other. A reasonable etas~
sification is always permissible. It is the interest of the passengers which
bas to be looked into in nationalisation of the routes and not necessarily
the interest of the private operators. It is clear from the counter-affidavit
filed on behalf of the appellants before the High Court that no case of
violation of Article I4 of the Constitution was made out. [I4G-H; IS-A]         F

      2. It is clear from the language of sub-section (3) of Section 68-D of
the Motor Vehicles Act, I939 that the approved scheme is a scheme as
published under Section 68-D(3) of the Act and its route is called the
"notified route" and unless such scheme i.e. draft scheme itself relates to     G
any inter-State route, the condition of the proviso, of taking prior Central
Government's approval will not arise. [14 C-D]

     S. Abdul Khader Saheb v. The Mysore Revenue Appellate Tribunal,
Bangalore and Ors., [1973) 2 SCR 925; K. Venkamma v. The Government of
Andhra Pradesh and Ors., [1977] 3 SCR 562 andAdarsh Travels Bus Service H
    6                     SUPREME COURT REPORTS (1992] SUPP. l S.C.R.

A and Al!T. v. State of U.P. and Ors., (1985) Suppl. 3 SCR 661, relied on.
         Andhra Pradesh State Road Transport Corporation, Hyderabad v. R.
    Maheshwari and Two Ors., AIR 1976 A.P. 232, overruled.

         M. Gangappa v. The Government of Andhra Pradesh and Ors., AIR
B   1975 A.P. 138, approved.

           3. The draft scheme totally excluded the private operators on the
    notified route and only after hearing the respondent No.1 in support of his
    objections that the prohibition was relaxed which was envisaged in the
    draft scheme. In the circumstances it cannot be said that instead of total
c   prohibition the embargo was lifted partially under the approved scheme,
    still the principles of Natural Justice have been violated. (14 E·F)

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2859 of
    1977.

D         From the Judgment and Order dated 30.6.1976 of the Andhra
     Pradesh High Court in Writ Appeal No. 684 of 1974.

            C.R. Seetharamiah and B. Parthasarthy for the Appellant.

            Vineet Kumar and NDB Raju for the Respondents.
E
            The Judgment of the Court was delivered by

          YOGESHWAR DAYAL, J. The present appeal is directed against the
    judgment of the Andhra Pradesh High Court dated 30.6.1976 whereby the
    Division Bench of the High Court dismissed the writ appeal No. 684 of
F   1974 filed by the appellant herein against the judgment of the learned
    Single Judge passed in writ petition No. 7581of1973 dated 15.3.1974. The
    appeal arises in the following circumstances :

            The appellant herein published a draft scheme relating to the route
G Tirupati to Kalahasti via Renigunta, Yerped which is an intra-State route
    as per the Andhra Pradesh Gazette dated 15.11.1972. The said scheme
    envisaged the exclusion of all the other operators on the proposed route
    except to the extent saved by the Note appended to the scheme. The Note
    appended to the draft scheme was as follows:-

H             "Note :- The scheme shall not affect -
          S.R.T.C. v. G.T.Y. REDDY[YOGESHWARDAYAL,J.]                      7

        (1) the other State Transport Undertakings,                             A
        (2) holders of stage carriage permits in respect of portions
        of the route, and

        (3) the holders of state carriage permits in respect of the
        routes: Srisailam to Tirupati and Tirupati-Vijayawada."                 B
      Respondent No.1, G.T. Venkataswamy Reddy, who is operating an
inter-State stage carriage service service from Bangalore to Kalahasti in-
cluding the nationalised portion Tirupati to Kalashasti, being aggrieved by
the draft scheme, filed objections thereto. After hearing the interested
objectors including the respondent No,l the draft scheme was approved           C
with some modifications and the relevant modification introduced by way
of clause (4) was as follows:

        "The scheme shall not affect:-

        CLAUSE N0.4 : The existing permit holders of stage                      D
        carriages on the inter-State routes overlapping the notified
        route, subject to the condition that they shall not pick up
        or set down intra-State passengers on the notified route. 11

       As per the notified scheme the route permit of respondent no. 1 was
                                                                                E
liable to be curtailed in law between Tirupati to Kalahasti which is a part
of the inter-State portion of the route of respondent No.1 but in the
approved scheme the aforesaid clause (4) permitted the permit holders of
stage carriages on the inter- State routes overlapping the notified route to
run the route subject to the aforesaid ''corridor restriciton", namely -
subject to the condition that they shall not pick up or set down intra- State   F
passengers on the notified route. The final Notification being No. 1505 was
issued on 17th November, 1973.

      The respondent No. 1 thereupon filed a writ petition in the High
Court of Andhra Pradesh being Writ Petition No. 7581 of 1973 inter a/ia G
contending amongst others that the modification as per clause (4) to the
approved scheme is outside the draft scheme and is also outside the
competence of the State Government under section 680 (2) of the Motor
Vehicles Act, 1939 (hereinafter referred to as 'the Act'). He also took the
plea that it violates Article 14 of the Constitution of India in view of clauses
1 to 3 of the Note to the approved scheme in comparison to clause 4 of H
    8                    SUPREME COURT REPORTS (1992] SUPP. I S.C.R.

A the Note appended to the approved scheme. Clauses 1 to 3 of the Note to
    the approved scheme were as follows:-

            "Note:- The scheme shall not affect -

            ( 1) The holders of Stage Carriage Permits in respect of
B           portions of the route.

            (2) The other State L.ransport Undertakings and.

            (3) '!'he holders of stage carriage permits in respect of
            routes Srisailam-Tirupathi and Tirupathi-Vijayawada."
c         The writ petition was contested by the appellant. The learned Single
    Judge, however, while following an earlier Single Bench judgment passed
    in Writ Petition Nos. 7327 of 1973 etc. etc.; Mrs. R. Maheshwari etc. etc. v.
    The State of Andhra Pradesh and others, dated 25th January, 1974 quashed
    a portion of the condition as contained in clause (4) of the Note to the
D   approved scheme viz. that respondent No.1 shall not pick up or set down
    intra-State passengers on the notified route. It was further held by the High
    Court in the said judgment that the notified scheme was opposed to the
    principles of natural justice without affording an opportunity to the objec-
    tors before approving the scheme by introducing clause (4) to the Note.
E
          The appellant being aggrieved with the judgment of the Single Bench
    took up the matter in appeal being Writ Appeal No. 684 of 1974 and the
    Division Bench by the impugned order dated 30th June, 1976, following an
    earlier decision of the Division Bench of the same High Court reported as
    Andhra Pradesh State Road Transport Corporation, Hyderabad v. R.
F   Maheshwari and two others, (1975) II An. W.R. 302 = AIR 1976 A.P. 232
    dismissed the appeal of the appellant herein. This decision of the Division
    Bench in Writ Appeal No. 374 of 1974 dated 15th July, 1975 is none other
    than against the Single Bench decision rendered in Writ Petition No. 7327
    of 1973 dated 25th January, 1974 mentioned earlier.
G          It appears that the learned Judges of the Division Bench who
    decided the case of R. Maheshwari (supra) were kept ignorant of an earlier
    Division Bench Judgment of the same High Court in M. Gangappa v. The
    Government of Andhra Pradesh and others, AIR 1975 A.P. 138 decided on
    _11th October, 1973. The earlier Division Bench had taken the view that if
H   the notified route is entirely within a single State, the scheme does not
          S.R.T.C. v. G.T.V. REDDY [YOGESHWAR DAYAL, J.]                     9

relate to an inter-State route. So, the proviso to sub-section (3) of Section     A
68D of the Act has no application. It was further held thus :

        "It is thus plain that the prior approval of the Central
        Government was necessary only if a particular scheme
        covers the route which is partly in one State and partly in
        another State but not otherwise. There is no prohibition ·                B
        for the buses operating in the inter-State route taking
        passengers from one terminus to the other terminus, the
        only objection being for picking up and setting down of
        passengers on the intermediate stages on the notified
        route within this State."                                                 c
      It was also held that "that is the type of order passed in that case.
Prior approval of the Central Government in such cases was not necessary".

       It appears from the facts stated in paragraph 4 of the judgment in the
case of R. Maheshwari and two others, (supra) that respondent No.1 therein        D
was the proprietrix of a transport company and was operating two inter-State
stage carriage permits. One stage carriage was on the route Tirupati to Ban-
galore in Karnataka via Chittoor and Palmaner and the other between
Tirupati and Veloor (Tarnilnadu) via Chittoor. The Andhra Pradesh State
Road Transport Corporation had published a scheme on 15th November,               E
1972 with regard to the route from Tirupati to Chittoor proposing to run road
transport services to the complete exclusion of private operators. In this way
the draft scheme excluded the private operators on an inter-State route com-
pletely from the overlapping portion of the notified route but in the approved
scheme there was a Note to the similar effect as we find clause (4) of the Note
in the present case. The learned Judges while passing the present impugned        F
order followed this latter decision of the Division Bench in the aforesaid case
of R. Maheshwari and two others.

      It will be noticed that in the case of R. Maheshwari and two others
(supra) the question ofvires of the draft scheme or approved scheme viz-a-viz G
Article 14 of the Constitution oflndia was neither raised nor decided.

     The later Division Bench of the High Court in the case of R.
Maheshwari and two others (supra) took the view that the "corridor restric-
tions11 contained in clause (4) of the Note is violative of proviso to sub-se~-
tion (3) of Section 68D of the Act as the said proviso envisaged that the         H
    10                    SUPREME COURT REPORTS 11992] SUPP. 1 S.C.R.

A   approved scheme under Section 68D may relate to ~n inter-State route, but
    before it could become an approved scheme, it must be published in the
    Official Gazette with the previous approval of the Central Government,
    though both the terminii of the notified route are in Andhra Pradesh. The
    Division Bench was also of the view that principles of natural justice have
    been violated inasmuch as that the Note appeared only in the approved
B   scheme but did not appear in the draft scheme forgetting that the draft
    scheme provided a complete exclusion of the private operators on the
    notified route subject to the note appended thereto.


          In S. Abdul Khader Saheb v. The Mysore Revenue Appellate Tribunal,
c   Bangalore and others, [1973] 2 SCR 925 the Supreme Court held that in
    that case there was no scheme of nationalisation relating to the inter.State
    route from Bellary to Manthralaya and the Bellary scheme was confmed
    only to the intra-State routes, one of which is the Bellary-Chintakunta
    route, whose terminii were within the Stale. That could be nationalised by
D   the State of Mysore under the provisions of Section 680 even though that
    portion overlaps the inter-State route from Bellary to Manthralaya. The
    Supreme Court also took the view that since the scheme also did not deal
    with an inter-State route at all no question of the applicability of the
    proviso to sub- section (3) of Section 680 of the Act, which requires the
    previous approval of the Central Government arises. The same view was
E   followed by this Court in K Venkamma v. The Government of Andhra
    Pradesh and others., [1977] 3 SCR 562. Krishna Iyer, J. noticed the case of
    Abdul Khader Saheb (supra) in the following words :



F                 "In Abdul Khader Saheb a totally untenable submis-
             sion was put forward and unhesitatingly turned down that
             if the nationalised route fell within a single State it should
             nevertheless be regarded as inter-State route for some
             mystical reason, viz., that it overlaps a longer route which
             is admittedly an inter-State route. It is elementary that
G            there can be inter- state routes which run into or through
             more than one State. A part of that long route may itself
             be a separate route and may fall wholly within a single
             State in which case the former may be inter-state while
             the latter will be an intra-state route. In Abdul Khader's
H            case the Court observed :-
      S.R.T.C. v. G.T.V. REDDY IYOGESHWAR DAYAL,l.J                 11

     "...The Bellary scheme provides for nationalisation of an           A
     intra-State route and not an inter-State route and the
     aforesaid provision can have no applicability.


     .. .If part of the sclieme covers routes which continue
     beyond the State and connect various points in the State            B
     of Mysore with those in the other State it does not make
     the scheme one connected with inter-State Route. It is
     sought to be argued from this that even if Bellary-Chin-
     takunta route which is shown as item 34 in Bellary Scheme
     has been nationalised it does not make the scheme one
     connected with inter-State route. Stress has been laid on
                                                                         c
     the example given that the Grand Trunk Road runs from
     Calcutta to Amritsar and passes through many States and
     any portion of it within a State can be a route for purposes
     of stage carriage but that would not make such a route
     part of an inter-State route even though it lies on the road        D
     which runs through many States.


        The above argument can possibly have no validity so
     far as the present case is concerned. The scheme which
     was under consideration in the decision relied upon was             E
     in respect of an intra-state route. It appears to have been
     argued that as the scheme was concerned with an inter-
     state route the approval of the Central Government was
     necessary as required under the proviso to Section 680
     (3) of the Act. This Court held that since the termini were         F
     within the State of Mysore the scheme did not deal with
.,   an inter-state route at all and no question arose of the
     applicability of the proviso to s. 680 (3). In the present
     case there is no scheme of nationalisation relating to the
     inter- state route from Bellary to Manthralaya. The Bellary
     Scheme is confined to the intra-state routes, one of those          G
     being the Bellary-Chintakunta. It may be that portion
     overlaps the iuter- state route from Bellary to Manthralaya
     but so long as it is an intra-state route it could be
     nationalised by the State of Mysore under the provisions
     of s. 680."                                                         H
    12                    SUPREME COURT REPORTS [1992] SUPP. 1 S.C.R.

A            No further comment is necessary."

        The learned Judges did not think it necessary to make even a
  comment as to the applicability of the proviso to sub-section (3) of Section
  680 of the Act to a notified route which was purely an intra-State route.
  The matter again came before a constitutional Bench of this Court in
B Adarsh Travels Bus Service and another v. State of U.P. and others., [1985]
  Suppl. 3 SCR 661. The appellants in that matter 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 in fact
C contended that they be 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 routes. In the
  appeals before the Supreme Court the question was : where a route in
  nationalised under Chapter IVA of the Motor Vehicles Act, 1939 whether
D a private operator with a permit to ply a stage carriage over another route
  but which has a common over-lapping sector with the nationalised route
  can ply his vehicle over that part of the over-lapping common sector if he
  does not pick up or set down passengers on the over-lapping part of the
  route. Before the Supreme Court on behalf of the operators it was con-
  tended that a "route" according to the definition in section 2(28A) of the
E 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 route, and that the complete
  exclusion of private operators from the common sector would be violative
  of Article 14 of the Constitution and also ultra vires Section 680 of the
  Act. It was further contended that the provisions of Chapter IV and
F
  Chapter IVA of the Act must be construed in such a manner as to allow
  permit holders to ply their stage carriages notwithstanding that parts of
  their route are also parts of notified routes. It was held thus :

             "None of the schemes contains any saving clause in favour
G            of operators plying or wanting to ply stage carriages on
             common sectors. However, there is invariably a clause in
             the scheme to the effect that no person other than the
             State Government Undertaking will be permitted to pro-
             vide road transport services on the routes specified in the
H            scheme. In view of this provision in the scheme there is a
             S.R.T.C. v. G.T.V. REDDY [YOGESHWAR DAY AL, J.]           13

        total prohibition of private operators from plying stage            A
        carriages on the whole or part of the notified routes. The
        appellants cannot therefore contend that they can ply their
        vehicles on the notified routes or part of the notified
        routes.

                              xx        xx        xx                        B

            A careful and diligent perusal of sections 68-C, 68-
        0(3) and 68-FF in the light of the definition of the expres-
        sion "route" in section 2 (28A) appears to make it
        manifestly clear that once scheme is published under                C
        section 68-0 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                D
        private operator can operate his vehicles on any part or
        portion of a notified area or not_ified 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                 E
        originally granted to him covered the notified route."

       It will be noticed that in the present draft scheme there was a total
exclusion of all operators except to the extent saved by the Note appended
to the scheme. That Note did not give any chance to private operators of
inter-State route to ply on the overlapping part of the route. After hearing F
the objections filed by respondent No.1 clause (4) of the Note, which
partially lifted the total embargo, proposed to be imposed in the draft
scheme, was introduced· which permitted plying subject to the "corridor
restrictions". Sub-section (3) of Section 680 of the Act alongwith its
proviso reads as follows :                                                   G

        "680. Objection to the scheme -

       (1)               xx        xx        xx

       (2)               xx        xx        xx                             H
     14                     SUPREME COURT REPORTS ll992J SUPP.1 S.C.R.

A             (3) The scheme as approved or modified under sub-
              section (2) shall then be oublished 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 :
B
                  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."
c          It is clear from the language of sub-section (3) of Section 680 of the
     Act that the approved scheme is a scheme as published under Section 680
     (3) of the Act and its route is called the "notified route" and unless such
     scheme itself i.e. draft scheme itself relates to any inter-State route, the
     condition of the proviso of taking prior Central Government's approval will
D    not arise and the same view was taken by this Court in the aforesaid cases.

            On behalf of the respondent plea was again urged that the condition
     contained in clause (4) of the Note regarding the "corridor restrictions" did
     not find place in the draft scheme and even thodgh they had tiled objec-
     tions and they had been heard, yet the principles of natural justice were
E    violated. It is suffice to say that the draft scheme totally excluded the
     private operators on the notified route and only after hearing the respon-
     dent No.1 in support of his objections that the prohibition was relaxed
     which was envisaged in the draft scheme. In the circumstances it cannot be
     said that instead of total pr~hibition the embargo is lifted partially under
F    the approved scheme still the principles of natural justice have been
     violated.

            Another argument urged was discrimination under Article 14 of the
     Constitution of India inasmuch as the scheme permits certain private
     operators in certain overlapping routes being given free permission to
G  operate whereas the respondent No. 1 who operates inter-State stage
   carriage service is being subjected to 11 corridor restrictions11 • This point does
   not appear to have been urged either before the Single Bench or before
   the Division Bench. However, it is not pointed out how the various routes
   are similar to each other. A reasonable classification is always permissible.
·H It is the interest of the passengers which has to be looked into in
          S.R.T.C. v. G.T.V. REDDY [YOGESHWAR DAYAL, J.]                 15

nationalisation of the routes and not necessarily the interest of the private A
operators. It is clear from the counter-affidavit filed on behalf of the
appellants before the High Court that no case of Article 14 of the Con-
stitution was made out.

      The result is that the appeal is allowed and the impugned judgments
of the High Court are set aside and the writ petition filed by respondent      B
No. 1 before the High Court is dismissed. Parties arc, however, left to bear
their own costs.

G.N.                                                       Appeal allowed.