Holding

The draft scheme of 13‑Feb‑1986 had not lapsed under Section 100(4) of the Motor Vehicles Act, 1988; the High Court’s finding to the contrary was a manifest error of law and is set aside.

Summary

The Uttar Pradesh State Road Transport Corporation (UPSRTC) prepared a draft scheme on 13‑Feb‑1986 to nationalise 39 bus routes under Section 68‑C of the Motor Vehicles Act, 1939. After objections were filed, the Motor Vehicles Act, 1988 came into force and the competent authority declared the scheme to have lapsed under Section 100(4) of the 1988 Act. The High Court upheld that view and quashed the scheme, but the Supreme Court had earlier, in Ram Krishna Verma, Nisar Ahmad and Gajraj Singh cases, held that the scheme had not lapsed. On appeal, the Supreme Court affirmed that the earlier decisions were binding, that the scheme remained valid, and that the High Court erred in re‑examining the lapse question and exceeding the limited scope of the writ petition. Consequently, the High Court’s judgment was set aside and the scheme was ordered to be heard on merits as directed in Gajraj Singh.

Issues considered

Whether the draft scheme dated 13‑Feb‑1986 published under Section 68‑C of the Motor Vehicles Act, 1939 had lapsed under Section 100(4) of the Motor Vehicles Act, 1988.
Whether the High Court could revisit the lapse question despite earlier Supreme Court rulings (res judicata).
Whether a writ petition under Article 226 is limited to reviewing the competent authority’s decision and not the validity of the scheme itself.
Whether the principle of res judicata applies to writ petitions and to statutory provisions.
Whether the scheme could be approved or modified in view of the objections filed.

Legislation cited

Code of Civil Procedure, 1908s. Section 11
Constitution of Indias. Article 226, s. Article 32
Motor Vehicles Act, 1939s. 68-C, s. 68-D
Motor Vehicles Act, 1988s. 100(2), s. 100(3), s. 100(4), s. 103(1-A)

Subjects

Motor Vehicles ActSection 100(4)Section 68-CNationalisation schemeRes judicataWrit petitionArticle 226Public interestTransport corporation

Judgment

A U.P. STATE ROAD TRANSPORT CORPORATION
v.
STATE OF U.P. AND ANR.

NOVEMBER 29, 2004

B [R.C. LAHOTI, CJ., G.P. MA THUR AND
P.K. BALASUBRAMANYAN, JJ.]

Motor Vehicles Act, 1988:

C Section I 00(4)-Applicability of-Draft scheme covering Saharanpur-
Shahdara-Delhi route and 38 other routes published on 13.2.1986 under S.
68-C of the Motor Vehicles Act, 1939-Before the objections against the
said draft scheme could finally be decided the 1988 Act came into force-
High Court held that the said draft scheme had lapsed by virtue of S.
D 100(4)-Correctness of-Held: In view of the earlier decisions of Supreme
Court the said draft scheme had not lapsed-Hence it was not open to the
High Court to examine the said question all over again and to hold that the
said draft scheme had lapsed-Moreover, the scope of the writ petition was
very narrow and, therefore, the High Court could not have gone into the
question as to whether the said draft scheme had lapsed under S. I 00(4)-
E Contention ofthe private operators that (i) State Road Transport corporation
was not in a position to cater to the needs of the people in the area and (ii}
the nationalization ofthe scheme would lead to serious financial trouble and
would throw the staffemployed by them out ofemployment, rejected-Motor
Vehicles Act, 1939, Ss.68-C and 68-D.
F
Constitution of India, 1950 :

Articles 32 and 226-Writ petition-Maintainability of-Held: Ifa writ
petition filed under Art. 226 is considered on merits and dismissed, the same
issue cannot be raised in a subsequent petition under Art. 32.
G
Practice and Procedure :

Res judicata-Principle of-Applicability-Held: Is based on the need
ofgiving a finality to judicial decisions-The said principle which prevents
H the same case being twice litigated is ofgeneral application and is not linked
442
U.P. STATE ROAD TRPT. CORPN. v. STATE 443

by the specific words of S. 11 CPC in this respect-Res judicata applies A
also between two stages in the same litigation-Code of Civil Procedure,
1908, S.11.

Res judicata-Principle of-Applicability-Statutory prohibition-
Held: Having regard to the factual position, the contention that the principle B
of res judicata can have no application if there is a statutory prohibition,
unsustainable.

The appellant-Corporation prepared a draft scheme to nationalize
Saharanpur-Shahdara-Delhi route and the same was published on
29.9.1959 in accordance with Section 68-C of the Motor Vehicles Act, C
1939. This Court quashed the said scheme. It was, however, left open
to the appellant Corporation to publish a fresh draft scheme if it was
necessary to do so.

Thereafter, the appellant-Corporation published a fresh scheme on D
13-2-1986, which not only covered the Saharanpur-Shahdara-Delhi route
but also 38 other routes. Objections were filed against the scheme and
before they could be finally decided. the Motor Vehicles Act, 1988 came
into force w.e.f. 1.7.1989 repealing the 1939 Act. The competent authority
thereafter held that the proposed scheme had lapsed by virtue of Section
100(4) of the 1988 Act. The appellant-Corporation preferred a writ E
petition but the High Court also took the view that the scheme had
lapsed and accordingly upheld the order of the competent authority and
dismissed the writ petition. This Court on 31.3.1992 in Ram Krishna
Verma 's case allowed the appeal against the decision of the High Court.
The State Government published a notification on 29.5.1993 whereby F
the draft scheme published on 13.2.1986 was approved.

.
Feeling aggrieved by the approved scheme dated 29-5-1993 several
operators filed writ petitions in the High Court but the same were
dismissed on 19-1:1.-1999 on the ground that the scheme stood approved
by the decisions of this Court in Ram Krishna Verma 's case and also in G
Nisar Ahmad's case. This Court in Gajraj Singh 's cas.e allowed the appeals
preferred against the judgment of the High Court. It was held in that
case that the decision in Ram Krishna Verma 's case was confined only
to one route namely. Saharanpur-Shahdara-Delhi route and as a result
of the said decision the draft scheme stood approved only with regard H
444 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A to the said route. The notification published on 13-2-1986 included not
only the Saharanpur-Shahdara-Delhi route, but also 38 other routes
and consequently the scheme had not been approved with regard to
these 38 routes and objections filed thereto required to be considered
on merits. It was further held in Gajraj Singh 's case that if all the
B objections or any of them are allowed, the draft scheme shall meet the
fate consistently with the decision on the objections and the approved
scheme dated 29.5.1993 shall be accordingly modified or annulled. In
the event of the objections being dismissed, the approved scheme, as
notified on 29-5-1993, shall continue to remain in operation.

C Thereafter, the competent authority after hearing the parties decided
the objectfons by his order dated 3.11.2001. The appellant-Corporation
and some private operators preferred writ petitions in the High Court.
The High Court held that the draft scheme dated 13.2.1986 had lapsed
under Section 100(4) of the Motor Vehicles Act, 1988 and, therefore, it
'D could not be approved. Hence the appeal.

On behalf of the respondents-private opera.tors, it was contended
that the appellant-Corporation was not in a position to provide transport
facilities to the people in the area and, therefore, the nationalization of
the route was not in pubic interest; that nearly 500 operators who had
E been granted permits after 1.7.1989 had taken loans from banks and
finance companies at a very high rate of interest to purchase buses and
in case the scheme of nationalization was enforced now they would be
completely thrown out of business land.ing them in serious financial
trouble; and the staff employed by them would also be thrown out of
F employment.

Allowing the appeal, the Court

HELD: 1. Having regard to the earlier litigation and the decisions
of this Court rendered with regard to the scheme in question, i.e. which
G was published under Section 68-C of the Motor Vehicles Act, 1939 on
13.2.1986, the view taken by the High Court that the same had lapsed
is wholly erroneous in law. (452-C, D]

2. In Gajraj Singh 's case, this Court noticed the earlier decisions
H rendered in Nisar Ahmad's case and Ram Krishna Verma 's case, and also
U.P. STATE ROAD TRPT. CORPN. v. STATE 445

the finding recorded therein that the scheme had not lapsed under A
Section 100(4) of the Motor Vehicles Act, 1988. Keeping in view the said
finding and also the provisions of Section 100(4) of the 1988 Act, this
Court gave a right to the operators to be heard under Section 100(2) of
the 1988 Act. The notification issued on 29.5.1993 by which the draft
scheme dated 13.2.1986 had been approved was not quashed, but merely B
a direction was issued that if the objections are allowed, the draft
scheme shall meet the fate consistent with the decision on the objections
and the approved scheme dated 29.5.1993 shall be modified accordingly.
These decisions clearly hold that the scheme had not lapsed under
Section 100(4) of the 1988 Act. [454-A, B, CJ
c
Ram Krishna Verma v. State of U.P., (1992) 2 SCC 620; Nisar Ahmad
.., v. State of U.P., (1994) Supp. 3 SCC 460 and Gajraj Singh v. State of U.P.,
(20011 5 sec 762, relied on.

Jeewan Nath Wahal v. STAT, (C.A. No. 1616of1968 decided on by D
Supreme Court on 3.4.1968) and Shri Chand v. Govt. of U.P., [1985) 4
sec 169, referred to.
3. This Court having specifically considered the question in two
earlier decisions as to whether the draft scheme dated 13.2.1986 had
lapsed under Section 100(4) of the Act and having recorded a clear E
finding that the scheme had not lapsed, it was not at all open to the High
Court to examine the said question all over again and to hold that the
draft scheme had lapsed. The High Court committed manifest error of
law in re-examining the question and recording a finding, which is
totally at variance with the earlier decisions of this Court. [455-C, D] F

4. In the writ petitions, which were filed in the High Court, what
was assailed was the decision of the competent authority. Therefore. the
scope of the writ petition was very narrow and the High Court could
only examine whether the competent authority had considered the
objections in accordance with the directions issued by this Court. In G
such a writ petition, the High Court could not have gone into the
question as to whether the scheme had lapsed under Section 100(4) of
the Act. [455-E, F]

/ ' 5.1. In Krishan Kumar's case, it was held that it would be legitimate H
446 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A to hold that in the case of a scheme under Section 68-C of the 1939 Act
pending on the date of enforcement of the new Act, namely, 1.7.1989,
the period of one year as prescribed under Section 100(4), should be
computed from the date of commencement of the 1988 Act. Therefore,
according to this decision, a draft scheme made under Section 68-C of
B the 1939 Act would lapse after 30.6.1990. (456-C, DJ

5.2. Having regard to the factual position that the scheme was
declared to have lapsed much before the expiry of the period of one year
and the decision in Krishan Kumar's case was ultimately reversed by this
Court in Ram Krishna Verma's case, wherein a direction was issued to
C publish the approved scheme, it cannot at all be held that the scheme
had lapsed. [456-EJ

Krishan Kumar v. State of Rajasthan, (1991) 4 SCC 258, held
inapplicable.
D
Ram Krishna Verma v. State of UP., [1992J 2 SCC 620, referred to.

6. The contention that the travelling public will suffer great hardship
ifthe scheme is allowed to stand on account of the fact that the appellant-
Corporation does not have sufficient number of buses to run on the
E routes in question, does not appear to have any substance, in view of
the clear stand of the appellant-Corporation that it is now making profit
and will induct more buses on the routes in question. Further, no such
plea as is sought to be raised now, was raised when this Court decided
the cases of Ram Krishna Verma, Nisar Ahmad and Gajraj Singh. By virtue
F of Section 03(1-A) of the Motor Vehicles Act, (as amended in the State
of U.P.), the appellant-Corporation can enter into agreements with the
bus owners to ply their buses on the nationalized routes. Such an
arrangement may be beneficial to the existing operators. [458-B, C, DJ

Ram Krishna Verma v. State of U.P., [1992J 2 SCC 620; Nisar Ahmad
G v. State of U.P., [1994J Supp. 3 SCC 460 and Gajraj Singh v. State of UP.,
[2001J 5 sec 762, referred to.

7. If a writ petition filed by a party under Article 226 is considered
on the merits as a contested matter and is dismissed, the decision thus
H pronounced would continue to bind the parties unless it is otherwise
U.P. STATE ROAD TRPT. CORPN. v. STATE 447

modified or reversed by appeal or other appropriate proceedings A
permissible under the Constitution and cannot be permitted to be
circumvented by a petition under Article 32.

Daryao v. State of UP., AIR (1960) SC 1457; Devi/al Modi v. STO,
AIR (1965) SC 1150 and Direct Recruit Class JI Engineering Officers' B
Association v. State of Maharashtra, (1990) 2 SCC 715, followed.

8. The principle of res judicata is based on the need of giving a
finality to judicial decisions. The principle, which prevents the same case
being twice litigated, is of general application and is not limited by the
specific words of Section 11 of the Code of Civil Procedure, 1908 in this
respect. Res judicata applies also between two stages in the same litigation
c
to this extent that a court, whether the trial court or a higher court
having at an earlier stage decided a matter in one way will not allow
the parties to re-agitate the matter again at a subsequent stage of the
same proceedings. (454-H; 455-A, B]
D
Satyadhan v. Smt. Deorajin Debi, AIR (1960) SC 941, relied on.

9. The contention that the principle of res judicata can have no
application ifthere is a statutory prohibition cannot be accepted having
regard to the factual position that the scheme was declared to have
lapsed much before the expiry of the period of one year. (456-G) E

Municipal Committee, Amritsar v. State of Punjab, (1969) 1 SCC 475;
Mathura Prasad Bajoo Jaiswal v. Dossibai N.B. Jeejeebhoy, [I970] 1 SCC
613; Nand Kishore v. State of Punjab, (1995) 6 SCC 614 and Allahabad
Development Authority v. Nasifuzzaman, (1996) 6 SCC 424, held
inapplicable.
F

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6341 of
2002.

From the Judgment and Order dated 23.7.2002 of the Allahabad High G
Court in C.M.W.P. No. 9332 of 2002.

WITH

C.A. Nos. 6342-6343, 6344-6345, 6347-48, 6350-51, 6353-54, 8575/
2002, 4196, 5258/2003, 7679 and 7681 of 2004. H
448 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

.A Ghulam E. Vahanvati, Solicitor General (NP), Sudhir Chandra Agarwal,
Dr. A.M. Singhvi, K.K. Venugopal, (NP), Harish N. Salve, (NP), Sudhir
Chandra, Ranjit Kumar, Dinesh Dwivedi, (NP), Pramod Swarup, Praveen
Swarup, Ms. Pareena Swarup, Ms. Rachna Gupta, Dr. Indra Pratap Singh,
D.K. Garg, B.S. Billowria, Rohit Pandey, D.K. Gupta, N.P. Midha, Sunil
B K. Jain, Manish Kumar, S. Borthakur, Dr. (Mrs.) Vipin Gupta, Ms. Rani
Chhabra, Ms. Sudha Pal, Ms. Seema Nair, Sunil Gupta, Additional Advocate
General, for State ofU.P., Pramod Dayal, Arohi Bhalla, R.C. Verma, (NP),
Rajnish Prasad, Kamlendra Mishra, Jeevan Prakash, Y.P. Dhingra and Manish
Shankar Srivastava for the appearing parties.

C The Judgment of the Court was delivered by

G.P. MATHUR, J. :

Civil Appeal No. 634112002
D
1. This appeal, by special leave, has been preferred against the judgment
dated 23.7.2002 of Allahabad High Court by which the scheme dated
13.2.1986 published under Section 68-C of the Motor Vehicles Act, 1939
and the approved scheme published on 29.5.1993 was quashed.

E 2. In order to appreciate the contentions raised by learned counsel for
the parties, it is necessary to mention the essential facts, as the case has a
long history. The Uttar Pradesh State Road Transport Corporation (for short
'UPSRTC') prepared a draft scheme to nationalize Saharanpur-Shahdara-
Delhi route and the same was published on 29.9.1959 in accordance with
F Section 68-C of the Motor Vehicles Act, 1939 (hereinafter referred to as the
'old Act'). The scheme was challenged by a number of operators and the
High Court by its judgments dated 31.l 0.1961 and 7 .2.1962 upheld the
scheme as against 50 operators, but quashed the same as against 32 and 18
operators who had filed two groups of writ petitions on the ground that they
should be afforded an opportunity of hearing. In appeal, the judgment of
G the High Court was upheld by this Court in Civil Appeal No. 1616of1968
decided on 3.4.1968 (Jeewan Nath Wahal v. STAT). The hearing of the
objections could not take place on account of interim orders passed in
various suits, which were filed by some of these operators, and as a result,
the scheme remained pending for over 20 years. Finally, the matter again
H came up to this Court and a two-Judge Bench quashed the scheme by the
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 449

judgment dated 23 .8.1985 on the ground that the delay of 26 years in A
disposing of the objections had resulted in violation of Articles 14 and
19(1)(g) of the Constitution. It was, however, left open to State Transport
Undertaking to publish a fresh draft scheme if it was necessary to do so.
The judgment is reported in 1985 (4) SCC 169 (Shri Chandv. Govt. ofU.P. ).
B
3. The UPSRTC thereafter published a fresh scheme covering in all 39
routes which was published on 13.2.1986 under Section 68-C of the old Act.
The scheme not only covered Saharanpur-Shahdara-Delhi route, but also 38
other routes. Objections were filed against the scheme and before they could
be finally decided, Motor Vehicles Act 1988 (for short '1988 Act') came
into force w.e.f. 1.7.1989 repealing the Motor Vehicles Act, 1939. The C
competent authority thereafter held that the proposed scheme had lapsed by
virtue of Section 100(4) of the 1988 Act. The UPSRTC preferred a writ
petition but the High Court also took the view that the scheme had lapsed
and accordingly upheld the order of the competent authority and dismissed
the writ petition. Some of the existing operators challenged the grant of D
permits under Section 80 of the 1988 Act by filing writ petitions, but the
same were also dismissed. The appeal against the decision of the High Court
was allowed by this Court on 31.3 .1992 and the grant of permits under
Section 80 of 1988 Act to the respondents/private operators of Civil Appeal
No. 1198 of 1992 and others on the respective routes, parts or portions of
the nationalized route of the draft scheme dated 13.2.1986 was quashed. E
The competent authority was directed to approve the draft scheme within
a period of 30 days from the date of receipt of the judgment and publish
the same in the Gazette. The judgment of this Court is reported in [ 1992]
2 SCC 620 (Ram Krishna Verma & Ors. v. State of U.P. Ors.). While the
competent authority was hearing the objections, the State Government F
published a notification on 29 .5 .1993 whereby the draft scheme published
on 13 .2.1986 under Section 68-C of the old Act was approved. The
notification specifically mentioned that the same was being done in view
of the directions given by Supreme Court in Civil Appeal Nos. 1198, 1199,
1200 & 1201of1992 [Ram Krishna Verma's case (supra)]. The approved
scheme covered all the 39 routes, which were proposed in the draft scheme G
published on 13.2.1986. Feeling aggrieved by the approved ss;heme dated
29.5.1993 several operators filed writ petitions in Allahabad High Court but
the same were dismissed on 19.11.1999 on the ground that the scheme stood
approved by the decisions of the Supreme Court in the case of Ram Krishna
Verma (supra) and also Nisar Ahmad v. State of V.P., (1994] Supp 3 SCC H
450 SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.

A 460. The appeals preferred against the judgment of the High Court were
allowed by this Court on 1.5 .200 l and the judgment is reported in [200 l]
5 SCC 762 (Gajraj Singh & Ors. v. State of UP. & Ors.). It was held that
the decision in Ram Krishna Verma 's case (supra) was confined only to one
route namely, Saharanpur-Shahdara-Delhi route, and as a result of the said
B decision the draft scheme stood approved only with regard to the said route.
The notification published on 13.2.1986 included not only the Saharanpur-
Shahdara-Delhi route, but also 38 other routes and consequently the scheme
had not been approved with regard to these 38 routes and objections filed
thereto required to be considered on merits. The operative portion of the
C judgment is being reproduced below:

"12. The appeals are allowed. The impugned judgment of the High
Court dated 19.l l.1999 is set aside. The writ petitions are partly
allowed. It is directed that the objections filed against the draft
scheme dated 13 .2 .l 986 insofar as they relate to the 3 8 routes listed
D at Serial Nos. 2 to 39 of the scheme, shall be heard and disposed
of by the competent authority on their own merits and in accordance
with law for which purpose the competent authority shall, within
a period of four weeks from today, appoint and notify a date for
hearing. We make it clear that only such of the objections shall
E be available to be heard and decided as were filed within 30 days
of the date of publication of the draft scheme in the Offici~l Gazette
and which are maintainable and available to be heard in accordance
with Section 68-D of the 1939 Act read with sub-section (2) of
Section 100 of the 1988 Act. .............................................................. .

F If all the objections or any of them are allowed, the draft scheme
shall meet the fate consistently with the decision on objections and
the approved scheme dated 29 .5 .1993 shall be accordingly modified
or annulled insofar as the routes specified at Serial l'ros. 2 to 39 are
concerned. In the event of the objections being dismissed, the
G approved scheme, as notified on 29.5. I 993, shall continue to remain
in operation. A(the risk of repetition we would like to make it clear
that insofar as Saharanpur-Delhi route is concerned, no objection
in that regard shall be heard and the scheme as regards the said route
shall be deemed to have been approved and maintained in terms
H of this Court's direction in Ram Krishna Verma case."
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 451

4. The competent authority (Special Secretary Transport, U .P. .A
Government), after hearing the parties decided the objections by his order
dated 3.11.2001. Feeling aggrieved by the decision of the competent
authority, the UPSRTC and some private operators preferred writ petitions
in the High Court. The High Court formulated five questions for determination
and one of the questions was whether the scheme dated 13.2.86 has lapsed B
by efflux of time in view of Section 100(4) of the New Act. The High Court
held that the draft scheme dated 13.2.1986 had lapsed under Section 100(4)
of the 1988 Act and, therefore, it could not be approved or modified and
accordingly the draft scheme dated 13 .2.1986 and the approved scheme
dated 29.5.1993 as modified by the order dated 3.11.2001, passed by the
competent authority, were quashed.
c
5. The learned Solicitor General, who was assisted by Shri Pramod
Swarup, appearing for UPSRTC, has submitted that the view taken by the
High Court that the draft scheme dated 13.2.1986 had lapsed by virtue of
sub-section (4) of Section 100of1988 Act, is patently erroneous as the said D
provision would apply only to a scheme which had been published under
sub-section ( 1) of Section l 00 of the Act and can have no application to
a scheme which was published under Section 68-C of the old Act, as is the
case here. Learned Solicitor General has further submitted that a clear
finding had been recorded in Ram Krishna Verma's case that the draft E
scheme dated 13.2.1986 had not lapsed under sub-section (-4) of Section 100
of 1988 Act, and further in view of the direction issued by this Court in the
case of Gajraj Singh, only certain objections were required to be heard by
the competent authority and the already approved scheme published on
29 .5 .1993 was to stand modified consistent with the decision on the objections.
It has thus been submitted that the scope of the writ petitions which had Leen F
filed in the High Court challenging the decision of the..competent authority
was a limited one, namely, to examine the correctness or otherwise of the
decision of the authority and it could not have enlarged the controversy and
thereafter to hold that the whole scheme had lapsed.
G
6. Shri Abhishek Singhvi, learned senior counsel, who has appeared
for private operators who have been granted permits after I. 7.1989 under
the 1988 Act has, on the other hand, submitted that by virtue of Section
217(2)( e) of the said Act, a scheme framed under Section 68-C of the old
Act which was in force and was pending immediately before the H
452 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A commencement of the 1988 Act, had to be disposed of in accordance with
the provision of Section 100 of the 1988 Act and, consequently, sub-section
(4) of Section 100 of the said Act was clearly applicable. The draft scheme
published on 13.2.1986 having not been approved within one year of the
enforcement of the 1988 Act i.e. by 30.6.1990, the said scheme lapsed.
B Reliance has also been placed on Krishan Kumar v. State of Rajasthan,
[1991] 4 sec 258 in support of the proposition that a scheme framed under
Section 68-C of the old Act had to be approved within one year from the
date of enforcement of the 1988 Act i.e. by 30.6.1990, otherwise it would
lapse.

c 7. We h_ave given our careful consideration to the submissions made
by learned counsel for the parties. In our opinion, having regard to the
earlier litigation and the decisions of this Court rendered with regard to the
scheme in question, i.e. which was published under Section 68-C of the old
Act on 13 .2.1986, the view taken by the High Court that the same had lapsed
D is wholly erroneous in law.

8. As mentioned earlier, the competent authority had at an earlier stage
held that the scheme had lapsed by virtue of sub-section (4) of Section 100
of the 1988 Act and the writ petition filed by UPSRTC against the said
E decision had been dismissed by the High Court on 16.3.1990. The aforesaid
decision of the High Court holding that the scheme had lapsed was challenged
in Ram Krishna Verma 's case (supra) and the Court specifically considered
the question as to whether the draft scheme dated 13.2.1986 had lapsed
under sub-section (4) of Section I 00 of the 1988 Act. A clear finding was
recorded that the scheme had not lapsed and the relevant part of paragraph
F 11 of the said report is being reproduced below:

"l l. ...... The hearing authority, therefore, wrongly concluded that
the draft scheme stood lapsed. The High Court also equally
committed illegality following its earlier view, which now stood
G overruled by this court in Krishan Kumar case. Accordingly it must
be held that the view of the High Court and the hearing authority
·is clearly illegal.

In paragraph 15 of the reports, it was reiterated that the fresh draft
H scheme dated February 13, 1986 had not lapsed and would continue to be
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 453
..
in operation and further that it would be confined only to 50 operators. The A
relevant part of operative portion of the order (paragraph 17 of the report)
is being reproduced below:

"17. The appeals are accordingly allowed. The grant of permits
to all the respondents/private operators and respondents 7 to 285
B
in C.A. No. 1198 of 1992 (SLP No. 9701 of 1990) under Section
80 of the Act or any others on the respective routes, parts or
portions of the nationalized routes of February 13, 1986 draft
scheme are quashed. The hearing authority shall lodge the objections
of the 50 operators including the appellants herein. The competent
authority shall approve the draft scheme of 1986 within a period c
of 30 days from the date of receipt of the judgment; and publish
the approved scheme in the gazette."

This very scheme again came up for consideration in Nisar Ahmad's case
(supra) and a· similar contention was raised that the scheme had lapsed under D
sub-section (4) of Section 100 of the 1988 Act. The challenge was repealed
and the relevant part of the judgment reads as under:

"3 ...... What is required by the proviso to sub-section (3) of Section
100 is a scheme proposed under the Act. The present one is not
a scheme proposed under the Act and that, therefore, the prior E
approval of the Central Government under the Act is not necessary.
It is also to be seen that sub-section (4) of Section 100 is clearly
inapplicable in the facts of this case. The scheme published by the
State Government on 13.2.1986 was under the Act 4of1939. The
draft scheme was pursuant to the directions issued by this Court, F
in consequence to the closing of hearing directed by this Court in
Jeewan Nath Wahal case became final. The hearing was delayed
due to dilatory tactics adopted by the operators and as per the
directions of this Court in Ram Krishna Verma case the draft
scheme was approved. In view of that matter and since this Court
has already approved the draft scheme not only dated 26.2.1959 but G
also of 13.2.1986, the question of the lapse under sub-section (4)
of Section 100 does not arise. The appeals are accordingly dismissed
with costs of Rs. 1 lakh."

- 9. In Gajraj Singh 's case (supra), the Court noticed the earlier decisions H
454 SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.

A rendered in Nisar Ahmad and Ram Krishna Verma, and also the finding
recorded therein that the scheme had not lapsed under sub-section (4) of ..
Section 100 of the 1988 Act. Keeping in view the said finding and also the
. provisions of sub-section (4) of Section ·l 00 of the Act, the Court gave a
•. right to the operators to be heard under sub-section (2) of Section 100 of
B the Act. The notification issued on 29.5.1993 by which the draft scheme
dated 13.2.1986 had been approved was not quashed, but merely a di~ection
was issued that if the objections are allowed, the draft scheme shall meet
. the fate consistent with the decision on the objections and the approved
scheme dated 29;5.1993 shall be modified accordingly. These decisions
clearly hold that the scheme had not lapsed under ~uh-section (4) of Section
C l 00 of the Aci.

10. In Daryao & others v. State ofU.P. & others, AIR (1960) SC 1457,
a Constitution Bench considered the application of rule of res judicata in
writ petitions. It was held that if a writ petition filed by a party under Article
D 226 is considered on the merits as a contested matter and is dismissed, the
decision thus pronounced would continue to bind the parties unless it is
otherwise modified or reversed by appeal or other appropriate proceedings
permissible under the Constitution, Similarly, in Devi/al Modi v. Sales Tax
Officer, AIR (1965) SC 1150, which is eilso a decision by a Constitution
Bench, it was held that it would not be right to ignore the principle of res
E judicata altogether in .dealing with writ petitions filed by citizens alleging
t~e contravent~on of their fundamental rights. It was further held that
considerations of public policy cannot be ignored in such cases, and the
basic doctrine that judgments prono~nced by the Supreme Court are binding
and must be regarded as. final between the parties in respect of matters
F. covered by them must receive due consideration. In Direct Recruit Class
II Engineering Officers' Association v. State of Maharashtra and others,
(1990] 2 SCC 715, the Constitution Bench emphasized that the binding
character of judgments of courts of competent jurisdiction is in essence a
. part of the rule of law on which the administration of justice, so much
emphasized by the Constitution, is founded and a judgment of the High
G Court under Article 226 passed after a hearing on the merits must bind the
parties till set aside in appeal as provided by the Constitution and cannot
be permitted to be circumv:ented by a petition under Article 32.

H
·· .· 11. The principle of res judicata. is based on the need of giving a
finality to judicial decisions. The principle which prevents the same case ·-
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 455

being t\ lice litigated is of general application and is not limited by the A
specific words of Section 11 of Code of Civil Procedure in this respect. Res
judicata applies also as between two stages in the same litigation to this
extent that a court, whether the trial court or a higher court having at an
earlier stage decided a matter in one way will not allow the parties to re-
agitate the matter again at a subsequent stage of the same proceedings. (See B
Satyadhan v. Smt. Deorajin Devi, AIR (1960) SC 941).

12. This Court having specifically considered the question in two
earlier decisions as to whether the draft scheme dated 13 .2.1986 had lapsed
under sub-section (4) of Section 100 of the Act and having recorded a clear
finding that the scheme had not lapsed, it was not at all open to the High C
Court to examine the said question all over again and to hold that the draft
scheme had lapsed. The decision rendered by this Court concluded the
controversy and it was not permissible to any party or to any authority/
tribunal or court, including the High Court to re-open the issue and to record
a contrary finding. We are clearly of the opinion that the High Court D
committed manifest error of law in re-examining the question and recording
a finding, which is totally in variance with the earlier decisions of this Court.

13. There is another aspect of the matter. The competent authority
heard the objections in view of the directions issued by this Court in Gajraj
Singh 's case. It was clearly provided in the judgment that the draft scheme E
shall meet the fate consistent with the decisions on objections and the draft
scheme dated 29.5.1993 shall be accordingly modified. In the writ petitions
which was filed in the High Court, what was assailed was the decision of
the competent authority. Therefore, the scope of the writ petition was very
narrow and· the High Court could only examine whether the competent F
authority had considered the objections in accordance with the directions
issued by this Court. In such a writ petition, the High Court could not have
gone into the question as to whether the scheme had lapsed under sub-
section (4) of Section 100 of the Act. The view taken by the High Court
that the scheme had lapsed is, therefore, wholly uncalled for and beyond
·the scope of the writ petition. G

14. Krishan Kumar's case (supra) which has been strongly relied upon
by Shri Singhvi for urging that the draft scheme dated 13.2.1986 had lapsed
by virtue of sub-section (4) of Section l 00 of the Act can be of no assistance
to him. In the said case, it was observed that ifthe period ofone year from H
456 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
"
A the date of publication of the proposed scheme is applied to the pending
schemes under Section 68-C of the old Act, the purpose and object of saving
the old schemes under clause (e) of Section 217(2) of the 1988 Act would
be frustrated. It was also observed that the scheme published under Section
68-C of the old Act pending on the date of commencement of the new Act
B would be a scheme proposed under sub-section ( 1) of Section 100 and,
therefore, the rigour of period of one year as applicable to a scheme proposed
under sub-section (1) of Section 100 would not apply to a scheme under
Section 68-C pending on the date of commencement of the Act. However,
after observing that it was not meant that a scheme under Section 68-C of
the old Act pending on the date of commencement of the new Act may be
C approved or finalized at leisure without any time limit, the Court, applying
the principle of harmonious construction, held that it would be legitimate
to hold that in the case of a scheme under Section 68-C of the old Act
pending on the date of enforcement of the new Act, namely, July 1, 1989,
the period of one year as prescribed under Section 100(4 ), should be computed
D from the date of commencement of the new Act. Therefore, according to
this decision, a draft scheme made under Section 68-C of the old Act would
lapse after 30.6.1990. But in the present case, the competent authority long
before 30.6.1990 held that the scheme had lapsed and the writ petition
preferred against the said decision was also dismissed on 16.3 .1990 on the
same finding. The decision of the High Court was then reversed by this
E Court in Ram Krishna Verma 's case (supra) and a specific direction was
issued to the competent authority to approve the draft scheme and publish
the same. Therefore, on the facts of the present case, it can'lot at all be held
that the scheme had lapsed.

F 15. Shri Dinesh Dwivedi, learned senior counsel for some of the
operators, who have been granted permits under 1988 Act has submitted that
principle of res judicata can have no application if there is a statutory
prohibition, and in support of his submission he has relied upon Municipal
Committee, Amritsar and others v. State ofPunjab and others, [ 1969] 1 SCC
G 4 75; Mathur a Prasad Bajoo Jaiswal and others v. Dossibai N. B. Jeejeebhoy,
(1970] 1 SCC613;NandKishorev.StateofPunjab, (1995]6SCC614and
Allahabad D-eve/opment Authority v. Nasiruzzaman and others, [1996) 6
SCC 424. The principles laid down in these decisions can have no arplication
here having regard to the factual position dis1.:ussed above that the scheme
was declared to have lapsed much before the expiry of period of one year
H and the said decision was ultimately reversed by this Court in Ram Krishna
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 457

Yerma 's case (supra), wherein a direction was issued to publish the appr-:-ved A
scheme, and also the fact that in Gajraj Singh 's case (supra), the matter was
remitted to the competent authority for a very limited purpose.

16. Shri A. Singhvi has also submitted that the UPSRTC cannot provide
transport facility to the people in the area and, therefore, the nationalization
B
of the routes is not in public interest. During the course of hearing an
additional affidavit has been filed by Shri Arvind Dikshit, one of the
respondents in Civil Appeal Nos. 6350-51/2002 wherein it is averred that
though the population in the area has greatly increased in the last about 15
years resulting in proportionate increase in travelling public, the number
o{buses being operated by UPSRTC has considerably gone down and many c
of such buses are over-age and in extremely bad condition. The UPSRTC
has suffered a Joss of Rs. 282.75 crores during the period 1996-97 to 2000-
01. It has thus been urged that the UPSRTC is not at all in a position to
cater to the needs of the people in the area by providing an efficient transport
service. Learned counsel has further submitted that nearly 500 operators D
who have been granted permits after 1. 7 .1989 had taken Joans from banks
and finance companies at a very high rate of interest to purchase buses and
in ci\$e the scheme of nationalization is enforced now, they will be completely
thrown out- of business landing them in serious financial trouble. The
drivers, conductors and other staff employed by them will also be thrown
out of employment. An affidavit in reply has been filed by Shri H.N. E
Aggarwal, General Manager, UPSRTC, Ghaziabad, wherein it is averred
that though earlier UPSRTC was sustaining losses, but subsequently stringent
measures have been adopted and in the year 2002-03 it earned a profit of
a
Rs. 92 lakhs and in period of five months i.e. from April to August, 2004,
it has earned a profit of Rs. 52. l 0 crores. It has also been averred that 2262 F
new buses have been inducted by UPSRTC in the last 2-1/2 years.

17. The contention sought to be raised by Shri Singhvi on the basis
of the additional affidavit filed by Shri Arvind Dikshit, cannot be accepted
for several reasons. As discussed earlier, the draft scheme covering 39
routes was published on 13.2.1986 and the same was approved on 29.5.1993. G
In view of the decision in Gajraj Singh (supra), the competent authority was
' required to hear only such objections which were filed within 30 days of
the publication of the draft scheme and the approved scheme as notified on
' 29.5.1993 was to stand modified consistent with the decision on the objections.

- No such plea as is sought to be raised now, was raised when the cases of H
458 SUPREME COURT REPORTS [2004) SUPP. 6 S.C.R.

A Ram Krishna Verma (supra), Nisar Ahmad (supra) and Gajraj Singh (supra)
were decided by this Court. It has been also submitted on behalf of the
UPSRTC that it did not put in many buses on the routes in question on
account of illegal running of buses by private operators who have been
granted permits subsequent to 1. 7 .1989. and after such illegal. running of
B buses is stopped, more buses will be inducted on the routes. Therefore, the
contention ofShri Singhvi that the traveling public will suffer great hardship
if the scheme is allowed to stand on account of the fact that UPSRTC does
not have sufficient number of buses to run on the routes in question, does
not appear to have any substance, in view of the clear stand of UPSRTC.
that it is now making profit and will induct more buses on the routes in
C question. By virtue of Section 103(1-A) of the Motor Vehicles Act (as
amended in the State ofU.P.), the UPSRTC can enter into agreements with
bus owners to ply their buses on the nationalized routes. Such an arrangement
may be beneficial to the existing private operators. On overall consideration
of the matter, we are clearly of the opinion that the factors sought to be
D ··highlighted by ShriSinghvi cannot be taken into consideration to have the
approved scheme annulled and nullified.

18. In view of the discussion made above, the appeal is allowed with
costs and the impugned judgment dated 23.7.2002 of the High Court is set
aside.· The writ petition preferred by UPSRTC against the decision of the
E competent authority and connected writ petitions shall be heard afresh by
the High Court iri the light of the direction issued by th is Court in the case
of Gajraj Singh (supra) after impleading all such parties who have been
granted relief by the competent authority.

F Civil Appeal Nos. 6342-4312002, 6344-4512002, 6347-4812002, 6350-511
2002, 6353-5412002, 857512002 & 419612003

19. In view of the decision in Civil Appeal No. 6341 of2002 (UPSRTC
v. State o/UP. & Anr.), the appeals are allowed mid the impugned judgment
dated 23.7.2002 of the High Court is set aside ..
G
Civil Appeal No.5258 of 2003

20. The appellants were granted permits on 11.2.1991 after the High
Court had held on 16.3. I 990 that the Scheme had lapsed. In view of our
H finding that the Scheme had not lapsed, the appellants are not entitled for
U.P. STATE ROAD TRPT. CORPN. v. STATE [MATHUR, J.] 459
..
renewal of their permits. The appeal is accordingly dismissed. A

Civil Appeal No. 767912004 @ S.L.P. (Civil) No. 2155712002 and Civil
Appeal No. 76812004 [@ S.L.P.(Civil) No. 1903412003}

21. Leave granted.
B
In view of the decision in Civil Appeal No. 6341 of 2002, the appeals
are allowed and the impugned judgment dated 23.7.2002 of the High Court
is set aside.

v.s.s. ,.
Appeal allowed. C