Holding

Inter‑state permits may be granted only after a reciprocal agreement between the concerned States as mandated by Sections 88(5) and 88(6) of the Motor Vehicles Act, 1988; the existence of a route is a condition precedent, and unilateral creation of such a route by a State authority is invalid.

Summary

The appellants were granted stage‑carriage permits by the Regional Transport Authority (RTA), Bikaner, to ply buses on a Sangaria‑Delhi inter‑state route. The Rajasthan Road Transport Corporation challenged the permits, arguing that the route was covered by a reciprocal transport agreement between Rajasthan and Haryana and that the RTA had no authority to create a new inter‑state route unilaterally. The Rajasthan High Court set aside the permits, holding that inter‑state routes must be created only through a reciprocal agreement as prescribed by Sections 88(5) and 88(6) of the Motor Vehicles Act, 1988. On appeal, the Supreme Court affirmed the High Court’s view, stating that Section 88(1) must be read in conjunction with the later subsections, that the existence of a route is a condition precedent, and that the RTA acted without jurisdiction. Consequently, the appellants’ permits were quashed and the appeal dismissed.

Issues considered

The scope of Section 88(1) of the Motor Vehicles Act, 1988 – whether it can be applied independently of Sections 88(5) and 88(6).
Whether a State’s Regional Transport Authority may unilaterally create an inter‑state route without a reciprocal agreement between the concerned States.
Whether the existence of a defined inter‑state route is a condition precedent for granting permits under Section 88(1).
The jurisdiction of the RTA to grant permits on a route not covered by a reciprocal agreement.

Legislation cited

Motor Vehicles Act, 1939
Motor Vehicles Act, 1988s. 88(1), s. 88(5), s. 88(6), s. 89

Subjects

Motor Vehicles Actinter‑state permitreciprocal agreementregional transport authorityroute existencejurisdictiontransport law

Judgment

ASHWANI KUMAR AND ANR. ETC. A
v.
REGIONAL TRANSPORT AUTHORITY, BIKANER AND ANR.

SEPTEMBER 29, 1999
B
[S. SAGHIR AHMAD AND R.P. SETHI, JJ.]

Motor Vehicles Act, 1988: Section 88( 1), (5) and (6)-lnter State Per-
mit~Appellants granted permit for plying buses on Sangaria-Delhi route
opened by R-1--Major part of the route falling in the State of Haryana-State
Transport Corporation challenged the grant of permit to appellants before
c
-~

High Court in a writ petition claiming that the said route was already covered
by its services provided under Regional Transport Agreement between the
States of Rajasthan and Haryana-Writ petition allowed, permit of appellants
quashed-On appeal--Held, independent construction of Section 88(1) of the
Act would frustrate objective of the Act-Existence of a route is condition D
precedent for grant of inter-State route under Section 88 (5) of the Act-inter-
State routes cannot be created unilaterally by one State as it requires a recipro-
cal agreement.

Appellants had been granted permit for plying their buses on the
E
Sangaria (Rajasthan) Delhi route by Respondent no. 1 Authority. It was
claimed to be a part of Ganganagar to Delhi route and was stated to be
falling in the reciprocal agreement between the two States. Respondent no.
2 the Rajasthan Road Transport Corporation challenged the grant of the
said route to the appellants, by filing a writ petition before High Court
submitting that under the Reciprocal Transport Agreement arrived at F
between the States of Rajasthan and Haryana, R-2 was providing services
on the Ganganagar-Delhi via Hanumangarh-Sangaria-Dabwal- Hissar, etc.
In the writ petition it was alleged that the appellants had applied for grant
of the permit on the new inter-state route without mentioning necessary
particulars. Later the appellants amended their applications by giving
details that out of the total length of the said route of 359 Km., 3 Km. fell G I
in the State of Rajasthan, 323 Km. fell in the State of Haryana while the
remaining 33 Km. fell in Delhi. After the said amendment, R-1 decided to
-1, open a new Sangaria-Delhi inter-state route for which temporary stage
carriage permits were granted to the appellants. The said writ petition was
allowed by the High Court holding that opening, establishing and creation H'
211
212 SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R ..

A of inter-state route lying in two or more states was the prerogative of the
. concerned states by entering into a reciprocal agreement and to get it
finalised by following the procedure prescribed under Section 88 (5) & (6) .
of the Motor Vehicles Act, 1988. The High Court also quashed the permit
granted in favour of the appellants. Appeal preferred by the appellants
B before the Division Bench of the High Court was dismissed. Hence the
present appeal.

The appellants contended that Section 88 (1) of the Act has to be
construed independently which did not prescribe the existence of a recipro~
cal agreement regarding the inter-state route permits. It was further
C contended that Section 88 (5) and (6) .of the Act cannot come in the way
of Regional Transport Authority of a State, which when granted, becomes
valid in the other State upon its being counter-signed.

Dismissing the appeals, the Court

HELD : 1. The contention of the appellant that Section 88(1) of the
D Motor Vehicles Act, 1988 has to be construed independently ignores the
opening words of the Section "except as may be otherwise prescribed"
completely. Such prescribing can be by way of the Act itself or by rules.
framed under it. Section 88(5) and (6) of the Act provide for procedure of
entering into agreement between the states for grant of inter-state permits.
The grant· of inter-state permits concerning the present appeals are per-
E missible under Section 88(5) of the Act. The existence of a route is a
condition precedent for exercise of power under Section 88(1) of the Act
Inter-State route under the scheme of the Act has to be reciprocal and
cannot be unilaterally created by one State or an Authority in the State.
The concerned State Governments are supposed to deliberate and decide
the routes to be opened as inter-State routes by determining the .number
F of trips each route to have and prescribe other conditions for the smooth
· functioning of the Act to achieve its objective which is claimed to be a social
welfare legislation. [216-D-E; 217-B-C-D]

2. The Motor Vehicles Act, 1939 which related to the law of motor
G vehicles \vas amended from time to time to keep ·it upto date. Various
committees examined different aspects of the road transport and recom-
mended updating, simplification and rationalisation of the law relating to
motor vehicles. A working group was constituted in January, 1984 to review
all the provisions ofthe Act and to submit draft proposals for comprehen-
sive legislation to replace the existing law. After considering the recommen-
H dations of the working group and obtaining the comments of the State
ASHWANI KUMAR v. REGIONAL TRPT. AUTHORITY [SETHI, J.] 213

Governments it was d)!cided to make important modifications in the Act in A
consonance with the growing requirements. A Bill was moved in Parliament
for seeking to achieve the objectives detailed in the Statement of Objects
and Reasons. The Act was thereafter passed on 14th October, l988. Accept-
ing the submissions made on behalf of the appellants would result in
frustration of the objective sought to be achieved by the Act. In the absence
of the existence of inter-State route, the authorities under the Act were not B
justified in granting the permits to the appellants. The orders of the
Authority granting permit in favour of the appellants were thus without
jurisdiction. [217-D-E-F-G-H; 218-A-B]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3341 of C
1997.
,_
WITH

C.A. No. 1122 of 1998.

From the Judgment and Order dated 27.11.95 of the Rajasthan High D
Court in D.B.C. Sp!. A. No. 361 of 1995.

Mrs. Rani Chhabra for the Appellants.

Sushi! K. Jain, Additional Advocate General for Rajasthan
(Aruneshwar Gupta) (NP) for the Respondents. E
The Judgment of the Court was delivered by

SETHI, J. IA Nos.2 and 3 filed in Civil Appeal No.1122 of 1998 are
allowed.

Regional Transport Authority, Bikaner is stated to have circulated a F
Circular Note No.3537 for opening a route Bhadra-Delhi being the inter-
State route lying within the jurisdiction of the States of Rajasthan, Haryana
and U.T. Delhi. Appellant Birbal applied for grant of one stage carriage
permit on the said route for which he offered his Bus Model No.1986.
Besides appellant, Abhey Singh and Kan Singh also submitted applications G
for the grant of permit on the same route. The Regional Transport
Authority, Bikarner (hereinafter referred to as 'RTA, Bikarner' is stated
to have resolved on 22nd November, 1993 to open the said route but
granted the permit in favour of Abhey Singh only for providing daily one
return trip. The appellant's application was rejected along with one Kan
Singh. Being aggrieved with the order of the RTA, Bikaner, the appellant H
214 SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R.

A and Kan Singh filed separate appeals, the appellant's appeal being
No.64/94 before the State Transport Appellate Tribunal, Rajasthan, Jaipur.
The Tribunal took up both the appeals together and allowed the same vide
its order dated 4.4.1994. The Tribunal is stated to have held that the order
of the RTA, Bikaner rejecting the applications of the appellants before it
was wrong since the vehicles offered by both of them were within the
B prescribed model in Resolution No. 1 of 1993 of the State Transport
Authority. The RTA, Bikaner was directed to grant stage carriage permit
to the appellant in respect of his bus for providing daily one single trip on
the condition that the permit would be valid on obtaining counter signa·
tures from the concerned States. The RTA, Bikaner is stated to have issued
permit in favour of the appellant vide its order dated 3.5.1993. Consequent
C upon theissuance of permit in its favour the appellant is stated to have
started plying his Vehicle No. RJ-07/P 0777 covered by route No.172.
However, in January, 1997 appellant's permit was cancelled by the RTA,
Bikaner purportedly consequent upon the decision of the Rajasthan High
Court dated 7.7. 1995 in Writ Petition No.2929/94 wherein it was held that
D the route in dispute did not exist before the passing of the order of the
RTA, Bikaner. Being aggrieved with the order of the RTA, Bikaner,
cancelling the appellant's permit a writ petition was filed by the appellant
in the High Court of Rajasthan submitting therein that the judgment of the
learned Single Judge dated 31st March, 1995 passed in Civil Writ No.1877
of 1994, confirmed by the Division Bench in Special Appeal No.361 of 1995
E by its order dated 7.11.1995, relied upon by the learned Single Judge in his
order dated 7.7.1995 in Writ Petition No.2929/94 had earlier been chal- .
lenged in the Supreme Court in SLP (C) No.18050/96 wherein leave was
granted on 11.8.1997 and the operation of the judgment of the High Court
stayed. It was contended that in view of the order of this Court, the
cancellation of the permit was illegal and deserved to be quashed. The writ
F petition filed by the appellant was dismissed on the ground of existence of
an alternative remedy under Section 89 of the Motor Vehicles Act, 1988.
Special Appeal (Writ) No.862 of 1997 filed by the appellant against the
order of the learned Single Judge was dismissed on 22nd August, 1997. Not
satisfied with the dismissal of his appeal, the appellant has preferred this
appeal.
G
Appellants in Civil Appeal No.3341 of 19<}7 claimed to have been
granted permit for plying their buses from Sangaria in Rajasthan to Delhi
route. The aforesaid route was claimed to be part of the route Ganganagar
to Delhi which was stated to be falling in the reciprocal agreement between
H the two States. Respondent no.2, the Rajasthan Road Transport Corpora-
ASHWANI KUMAR v. REGIONAL TRPT. AUTHORITY [SETHI, J.] 215

tion filed a writ petition in the High Court of Rajasthan against the grant A
of route permits to the appellants. A learnpd Single Judge of the High
Court vide his order dated 31st January, 1995 set aside the order of the
RTA, Bikaner granting permits to the appellants on Sangaria to Delhi
inter- State route. The appeal filed against the judgment of the learned
Single Judge was dismissed vide the impunged judgment in this appeal. The B
respondent-Corporation in its writ petition had submitted that under the
Reciprocal Transport Agreement arrived at in between the States of Rajas-
than and Haryana, the Corporation was providing services on the Gan-
ganagar-Delhi via Hanumnagarh-Sangaria-Dabwal-Hissar, etc. The appel-
lants had applied in October, 1993 for grant of stage carriage permits in
their favour by opening a new inter-State route Simgaria to Delhi via C
Dabwali-Hissar without mentioning therein the necessary particulars. It is
alleged that on 21st October, 1993 the RTA, Bikaner was informed that
the applicants had not disclosed the particulars of Sangaria-Delhi route
which was overlapping by the notified route and the details of the length
of the route. The Secretary, RTA, Bikaner vide his Circular Note dated D
28th October, 1993 stated that all the three applicants, including the
appellants had amended applications on 27th October, 1993 for Sangaria-
Delhi inter-State route in a length of 359 kilometers out of which a small
portion in a length of 3 kilometers lay in the State of Rajasthan and 323
kilometers in the State of Haryana. The remaining portion of 33 kilometers
~,.
was stated to be in Delhi. The RTA, Bikaner, after considering the circular E
notes sent by the Secretary to the RTA decided to open a new Sangaria-
Delhi inter-State route for which temporary stage carriage permits were
granted to the appellants.

As noticed earlier, the writ petition was allowed by the learned Single F
Judge holding that under the provisions of Motor Vehicles Act, 1988 it was
the prerogative of the two or more concerned States only to open, establish
and create an inter-State route lying in the respective jurisdiction by
entering into a reciprocal agreement and to get it finalised by following the
procedure prescribed under sub-sections (5) and (6) of Section 88 of the
Act. It was found on facts of the case that there did not exist any such G
agreement amongst the concerned States. The route was found to be
non-existent prior to the passing of the order impugned in the High Court.
It was found that the route Sangaria-Delhi had been opened by the RTA,
Bikaner for the first time consequent to which the permits were granted to
the appellants. In the absence of any specific provision in that regard H
216 SUPREME COURT REPORTS (1999] SUPP. 3 S.C.R.

A empowering the RTA to open inter-State route without following proce-
dure, the RTA was held to have committed illegality. The appellants were
held to be operating on the inter-State route in the absence of a reciprocal
agreement which overlapped the permits granted to the Corporation for
Sangaria-Delhi inter-State route. Private operators were held to have been
excluded from plying their vehicles on the said route. The permit granted
B in favour. of the appellants on the Sangaria-Delhi inter-State route was
quashed. The Division Bench confirmed the judgment of the learned Single
Judge vide judgment impugned in this appeal.

We have heard the learned counsel appearing for the parties and
c perused the records. As the question of law sought to be raised is
common in both the appeals, they are being disposed of by this common ~
judgment.

Learned counsel appearing for the appellants Mrs. Rani Chhabra
D submit~ed that sub-Section (1) of Section 88 has to be construed
independently which, according to her, did not prescribe the existence of
a reciprocal arrangement regarding the inter-State route permits,
According to her sub-sections (5) and (6) cannot come in the way of RTA
of a State to grant the permit in a State which, when granted, becomes
E valid in the other State upon its being counter-signed. Such an argument
completely ignores the opening words of the Section "except as may be
otherwise prescribed". Such prescribing can be by way of the Act itself or
by rules framed under it. Sub-section (5) provides that a proposal to enter
into an agreement between the States to fix the number of permits which
is proposed to be granted or countersigned in respect of each route or
F area, shall be published by each of the State Government concerned in
their official gazette and in any one or more newspapers in regional
language circulating in the area or route proposed to be covered by the
agreement together with a notice of the date before which representation
in connection therewith may be submitted and the date not being less than
G thirty days from the date of publication on which the Authority by which, t
and the time and place at which, the proposal and any representation
received in connection therewith will be considered. Sub-section (6)
provides that every agreement arrived at between the States shall, in so far
as it relates to the grant of counter signature of permits, be published by "

H each of the State Governments concerned in the Official Gazette and in
ASHWANI KUMAR v. REGIONAL TRPT. AUTHORITY [SETHI, J.] 217

any one or more of the newspapers in the regional language circulating in A
the area or route covered by the agreement and the State Transport
,-. Authority of the State and the Regional Transport Authority concerned
shall give effect to it. The Act envisages three categories of permit-seekers,
namely (i) Inter-region, (ii) Intra-region and (iii) inter-State. Different
criteria and procedure has been provided under the Act for granting B
permits in respect of each of the categories. The grant of inter-State
permits with which we are concerned in these appeals arc permissible
under Section 88~5) of the Act. The existence of a route is a condition
precedent for exercise of the power under Sub-section (1) of Section 88 of
the Act. Inter State route under the scheme of the Act has to be recriprocal
and cannot be unilaterally created by one State or an Authority in the State.
c
The concerned State Governments arc supposed to deliberate and decide
the routes to be opened as inter-State routes by determining the number
of trips each route to have and prescribe other conditions for the smooth
functioning of the Act to ~chieve its objective which is claimed to be a
D
social welfare legislation. It has to be noted that the Motor Vehicles Act,
1939 which related to the law of motor vehicles was amended from time to
time to keep it upto date. Various committees like National Transport
Policy Committee, National Police Commission, Road Safety Committee,
Low Powered Two Wheelers Committee and the Law Commission of India
examined different aspects of the road transport and recommended E
updating, simplification and rationalisation of the law relating to motor
vehicles. A working group was constituted in January, 1984 to review all
the provisions of the Act No.4 of 1939 and to submit draft proposals for
comprehensive legislation to replace the existing law. After considering the
recommendations of the working group and obtaining the comments of the F
State Governments it was decided to make important modifications in the
Act by taking care of the fast increasing of both commercial vehicles and
personal vehicles in the country, the need to encourage the adoption of
high technology in automotive seGtor, the greater How of passenger and
freight, the concern of road safety standards, pollution control measures, G
.
..• standards of transportation of hazardous and explosive materials, the
parameters where the private and public sector can co-exist and develop
and for effective ways of tracking down traffic offenders. A Bill was moved
in the Parliament for seeking to achieve the objectives detailed in the
statement of objects and reasons. The Act was thereafter passed on 14th H
,•
218 SUPREME COURT REPORTS [1999) SUPP. 3 S.C.R.

A October, 1988.
Accepting the submissions made on behalf of the appellants would
result in frustration of the objective sought to be achieved by the Act. The
interpretation put by the High Court is rationale, legal and proper. In the
absence of existence of inter-State route, the authorities under the Act
B were not justified in granting the permits to the appellants. The existence
of permit depends upon the reciprocal agreements between the States
covered by the route which, admittedly, did not exist in the instant case.
The orders of the Authority granting permit in favour of the appellants
were thus without jurisdiction.
c Under the circumstances the· appeals are dismissed with costs as-
sessed at Rs.500 each.

R.C.K. Appeal dismissed.

I ;