REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL  NO(S). 10002/2018 (ARISING FROM SLP(C) No(s).19092/2011)

AMBALA BUS SYNDICATE PVT. LTD.                     APPELLANT(S)

                               VERSUS

CHANDIGARH ADMINISTRATION & ORS.                   RESPONDENT(S)

J U D G M E N T KURIAN, J.

Heard learned counsel for the parties.

2. Leave granted.

3. The appellant is aggrieved by the judgment dated

21.04.2011 passed by the Division Bench of the High

Court of Punjab and Haryana at Chandigarh in Letters

Patent Appeal No.1098 of 2010, whereby the Division

Bench overturned the view taken by the learned Single

Judge of the High Court and held that the appellant

cannot  operate  its  stage  carriages  beyond  the

territory of Punjab in view of the 1998 Scheme, as

amended in 2001.  The relevant consideration in the

impugned order reads:-

“The 1998 Scheme and the modified Scheme of

2001  does  not  permit  non-air  conditioned

buses  of  the  private  operators

(persons/agencies)  to  operate  in  the  U.T.,

Chandigarh.  Section  66  of  the  1988  Act

prohibits an owner of the motor vehicle to

permit  use  of  his  vehicle  as  a  transport

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vehicle in any public place whether or not

carrying  any  passengers  or  goods  without

permit  granted  or  counter-signed  by  the

competent  authority.  This  Section

necessitates a permit for a vehicle to be

used as a transport vehicle. Section 88 of

the 1988 Act provides counter-signatures of a

permit granted in any one State to be valid

in any other State. Since the 1998 Scheme of

the U.T. Chandigarh excludes the operation of

private  operators  altogether,  which  Scheme

has been framed under Section 99 read with

Section  100  of  the  1988  Act  falling  in

Chapter VI of the 1988 Act, the same shall

have an over riding effect. If that be so,

the respondent-Company, a private operator,

has no right to claim counter-signatures from

the  Authority  of  U.T.  Chandigarh  on  the

permit issued to it by the Authority of the

State  of  Punjab  under  the  Reciprocal

Agreement dated 4.6.2008 also.

In the light of the above conclusions

reached by us, the respondent-Company cannot

claim  counter-signatures  on  an  inter-State

permit from the Authority of U.T., Chandigarh

to operate a non-air conditioned bus in the

territory of U.T. Chandigarh.”

4.  Unfortunately, the Division Bench has missed the

crucial  relevance  and  effect  of  the  reciprocal

Agreement  of  2008,  which  came  into  effect  on

04.06.2008, which specifically provides for counter

signature of non-A.C. buses.  The relevant paragraph

is set out below:-

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“The routes mentioned in Annexures A,B,C

& D shall always mean the shortest direct

route connecting the two terminals lying in

the two states through the places mentioned

therein.  Any discrepancy discovered later in

the name or length of route shown in the said

annexure shall promptly be corrected through

correspondence  between  the  reciprocating

States/UT and shall not be treated as any

modification  of  the  agreement.   The  Air

conditioned  and  Non-air  conditioned  buses

owned  and  operated  by  STU’s  of  both  the

State/UT shall only be allowed subject to the

counter signatures.  Integral Air Conditioned

Buses  of  the  private  operator  shall  be

allowed on the routes covered in annexure D

to  this  agreement  subject  to

countersignatures, provided that permits for

such  Buses  shall  not  be  extended  beyond

Chandigarh except in Punjab area.  Non air

conditioned  buses  of  the  private  operators

having permits issued before 01.11.1966 may

be allowed after verification of the original

permits and countersignatures provided that

such permits shall be countersigned only if

they fall in the scope and terms of Section

74 of the Punjab Reorganization Act, 1966 and

provisions of Motor Vehicles Act, 1988.”

5. There is no dispute that despite the Scheme of

1998,  as  amended  in  2001,  the  appellant  operated

their stage carriage up to 2008.  According to the

learned counsel appearing for Respondent Nos.1 and 3,

reciprocal  Agreement  of  2008  specifically  contains

the provision to deny the counter signature of the

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bus operated by the appellant in the Union Territory

of Chandigarh.

6. Despite the persuasive arguments advanced by the

learned counsel for Respondent Nos.1 and 3, we find

it difficult to appreciate the contention.  Learned

counsel has specifically referred to Chapter VI of

the Motor Vehicles Act, 1988 (for short, ‘the said

Act’) and has invited our attention to Section 98 of

the said Act to  canvass the point that the Scheme

under  Chapter  VI  of  the  said  Act  has  overriding

effect  over  the  reciprocal  Agreements  contemplated

under Section 88, coming under Chapter V of the said

Act.  Section 98 of the said Act reads as follows:-

“98. Chapter to override Chapter V and other

laws.- The provisions of this Chapter and the

rules and orders made thereunder shall have

effect notwithstanding anything inconsistent

therewith contained in Chapter V or in any

other law for the time being in force or in

any instrument having effect by virtue of any

such law.”  

7. Section 88 (5) and (6) under Chapter V read as

under:-

“88  (5)  Every  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 area, shall be published by each of

the  State  Governments  concerned  in  the

Official Gazette and in any one or more of

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the  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

representations in connection therewith may

be submitted, and the date not being less

than thirty days from the date of publication

in the Official Gazette, on which, and the

authority by which, and the time and place at

which,  the  proposal  and  any  representation

received  in  connection  therewith  will  be

considered.  

(6) Every agreement arrived at between the

States shall, insofar as it relates to the

grant  of  countersignature  of  permits,  be

published by each of the State Governments

concerned in the Official Gazette and in any

one or more of the newspapers in the regional

language  circulating  in  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.”

8. There cannot be any dispute that the Scheme is

unilateral,  whereas  the  reciprocal  agreements  are

bilateral.  Despite the availability of Scheme, the

Union Territory of Chandigarh and the State of Punjab

have consciously entered into a reciprocal agreement

permitting the non-A.C. buses, for which the State of

Punjab  had  issued  permits  prior  to  1966  and  it

continued to be renewed by the State of Punjab to

operate in the Union Territory of Chandigarh.  It has

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also come in the affidavit of the State of Punjab

that such  mileage has been taken into consideration

for the mileage entitlement of the Union Territory of

Chandigarh,  in  the  reciprocal  agreement  which  has

come into effect on 04.06.2008.  Therefore, unless

the  reciprocal  agreement  is  superseded  by  a  fresh

agreement or unless there is a new scheme framed by

the  Union  Territory  of  Chandigarh  specifying  the

provisions to the contrary, the buses operated by the

appellant,  which  had  permits  issued  prior  to

1.11.1966  and  so  long  as  they  are  renewed  by  the

State of Punjab, the Union Territory of Chandigarh

cannot refuse counter signature for the reason that

the permits already issued in 1966 had outlived its

life  after five  years of  the reorganization.   The

overriding effect provided in Section 98 of the said

Act operates only in case of an inconsistency on a

legal position.  There is no such situation in the

present  case.   On  the  contrary,  the  reciprocal

agreement is on mutually beneficial terms.  

9. Therefore, we set aside the impugned order passed

by the Division Bench and restore that of the learned

Single Judge of the High Court.

10. The  appeal  is,  accordingly,  disposed  of.  The

consequences will follow and needful shall be done

within four weeks from today.

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11. Pending  applications,  if  any,  shall  stand

disposed of.

12. There shall be no orders as to costs.

.......................J.               [KURIAN JOSEPH]  

.......................J.               [SANJAY KISHAN KAUL]  

NEW DELHI; SEPTEMBER 26, 2018.

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