G.T. Venkataswamy Reddy Vs. State Transport Authority and Ors.

Judges: T.S. Thakur, C.J.I., F.M. Ibrahim Kalifulla, S.A. Bobde, R. Banumathi and U.U. Lalit, JJ.

Facts:

Initial permit was granted to the Appellant for a specific route. Later on, an application was made by the Appellant to the State Transport Authority (STA) for grant of four additional singles and one additional vehicle. The Authority granted two additional singles with inclusion of one additional vehicle which lead to variation of permit.

This was challenged before the High Court and matter lateron reached before the Division Bench of Present Court. The Division Bench in their order in the case of R. Raghuram v. P. Jayarama Naidu and Ors., MANU/SC/0432/1989 has referred the matter to the Three Judge Bench, which was further referred to present Constitution Bench.

Issues:

(i) Whether the number of the trips of the vehicles of the existing operators can be increased by granting the variation of the permit even when the existing operators are allowed to carry on their operation on the date of the publication of the scheme as it was existing as on that date.

Analysis:

(i) A conspectus consideration of Sub-sections (1) to (5) and (7) along with Sub-section (8) of Section 57 shows that an application for variation when treated as an application for the grant of a new permit, all the mandatory requirements which are to be followed for the grant of a new permit have to be followed in letter and spirit even with reference to an application for variation viz., in the case on hand for either increasing the trips as well as for increasing the number of vehicles.

(ii) Having thus analysed the entire Section 57 of the Act barring Sub-section (6) and Sub-sections (9) and (10), it must be stated that though in Sub-section (8), it is stated that an application for variation should be treated as an application for the grant of a new permit, in effect, such consideration of an application for variation would be nothing but an application for the grant of a new permit as every required step for the grant of a new permit will have to be applied and scrupulously followed in order to consider an application for variation and for its ultimate disposal.

(iii) Therefore, the decision of ' R. Raghuram v. P. Jayarama Naidu and Ors.-MANU/SC/0432/1989' to the effect it observed that the application for variation in spite of such specifications and requirements to be complied and carried out under various Sub-sections of Section 57 of the Act, it is merely a fictional requirement and will not amount to requirement strictly to be followed and applied in the case of grant of a new permit, overruled. However, the contra opinion expressed in ' R. Raghuram v. P. Jayarama Naidu and Ors.-MANU/SC/0432/1989' will hold good.

(iv) Further, the formulation of a scheme is to be prepared and published by a State Transport Undertaking in respect of the services to be provided in any area or route to be covered. The underlying object for such formulation of a scheme for its preparation and publication, must be for providing an EFFICIENT, ADEQUATE, ECONOMICAL and PROPERLY coordinated road transport service with the paramount consideration of public interest and such scheme should be prepared and published.

(v) Once the approved scheme comes into play, then, there will not be any scope for grant of any permit in that area or the route covered by the scheme, except what is specifically permitted or provided under that scheme itself.

(vi) Once things get frozen, the frozen stage can be changed only by way of a permitted process. Thus, when by virtue of Section 68FF of the Act, the permit stood frozen, as on the date the scheme was published, then, if the said frozen stage is to be altered or modified, the provision by which such modification or alteration can be effected can be only by applying Section 68E, which is the legally permissible manner in which such frozen stage can be altered or modified. Any other manner in which the said frozen stage is sought to be altered or modified, that is totally prohibited under the statutory provisions.

Conclusion:

(i) Chapter IV-A supersedes any inconsistent provisions in Chapter IV.

(ii) The policy of the Legislature is clear from Section 68C that the State Transport Undertaking may initiate a scheme for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service to be run and operated by the State Transport Undertaking in relation to any area or route or portion thereof. It may do so if it is necessary in the public interest.

(iii) Grant of variation Under Section 57(8) will be as good as grant of a new permit.

(iv) Section 57(8) is controlled by Section 68FF falling under Chapter IV-A, by virtue of the superseding effect of Section 68B also falling under Chapter IVA

(v) Once a scheme formulated Under Section 68D gets approved under 68D(3) of Chapter IVA, then all the permits in the route/area covered by the scheme will get frozen by virtue of operation of Section 68FF.

(vi) The effect of Section 68FF can be altered/modified/cancelled only in the manner as provided for Under Section 68E and in no other manner.

(vii) By virtue of the above, either a grant of a new permit or the variation of an existing permit of private operator cannot be ordered in respect of an area or route covered by an Approved Scheme.

(viii) Increase in the number of trips or vehicles which were being run under the existing exempted permit under a Scheme will amount to grant of a new permit to operate one more Stage Carriage which is not permissible Under Section 68FF.

(ix) The proposition of law, laid down by this Court in 'JAYARAM' impliedly stood overruled in 'ADARSH TRAVELS'.

(x) The economy and coordination, two of the factors, which govern the Approved Scheme, will be seriously infringed if the variation is to be granted of the existing permit condition.

(xi) Even if there is an interstate agreement Under Section 63 of the Act for increasing the number of trips, such an agreement cannot override the provisions of Chapter IV-A by virtue of Section 68B of the Act. Section 63 being in Chapter IV of the Act, the Scheme approved under Chapter IV-A will prevail over it.

(xii)The Approved Scheme will exclude the operation of other stage carriage services on the Route/Area covered by the Scheme, except those whose names are mentioned in the Scheme and to the extent to which such exception is allowed.

(xiii) The provisions in Chapter IV-A are devised to override the provisions of Chapter IV and it is expressly so enacted, the provisions of Chapter IV-A are clear and complete regarding the manner and effect of the "takeover" of the operation of a road transport service by the State Transport Undertaking in relation to any Area or Route or portion thereof (ADARSH TRAVELS).

(xiv) A necessary consequence of those provisions is that no private operator can operate his vehicle on any part or portion of a notified area or notified route unless authorized so to do by the term of the scheme itself. He may not operate on any part or portion of the notified Route or Area on the mere ground that the permit as originally granted to him covered the notified Route or Area (ADARSH TRAVELS).

Thus, judgment reported in Karnataka State Road Transport Corporation, Bangalore v. B.A. Jayaram and Ors.-MANU/SC/0218/1984 is no longer a good law and the decision reported in Karnataka State Road Transport Corporation, Bangalore v. B.A. Jayaram and Ors.-MANU/SC/0218/1984stands approved which is in tune with the Constitution Bench decision reported in Adarsh Travels Bus Service and Anr. v. State of U.P. and Ors.-MANU/SC/0243/1985 and the observations made in R. Raghuram v. P. Jayarama Naidu and Ors.-MANU/SC/0432/1989 stands approved.

Important Precedents:

(i) Karnataka State Road Transport Corporation, Bangalore v. B.A. Jayaram and Ors.- MANU/SC/0218/1984

(ii) Karnataka State Road Transport Corporation, Bangalore v. B.A. Jayaram and Ors.- MANU/SC/0218/1984

(iii) Adarsh Travels Bus Service and Anr. v. State of U.P. and Ors.-MANU/SC/0243/1985

(iv) R. Raghuram v. P. Jayarama Naidu and Ors.-MANU/SC/0432/1989