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                                                     NON-REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.11194  OF 2017 (Arising out of SLP(C) No.35947 OF 2010)

U.P. State Road Transport Corporation           …..Appellant

Versus

Sandeep Kumar Jain & Ors.              ..Respondents

WITH CIVIL APPEAL NO.11195  OF 2017

(Arising out of SLP(C) No.69 of 2011)

J U D G M E N T

MOHAN M. SHANTANAGOUDAR, J.

       Leave granted.

2. These  appeals  are  filed  questioning  the  validity  of  the

judgment  dated  30.7.2010  passed  by  the  High  Court  of

Judicature at Allahabad,  Lucknow Bench in W.P.  No.  2161 of

2007 by which the Lucknow Bench has allowed the writ petition.

3. Learned  counsel  for  the  appellant/corporation  argued

mainly  relying  upon  the  Division  Bench  judgment  of  the

Allahabad High Court in the case of Smt. Kanchan & Ors. Vs.

State  Transport  Appellate  Tribunal  and  Ors.  (in  Civil

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Miscellaneous  Writ  Petition  No.  48624 of  2002 decided on 4th

April  2003)  that  the  matter  involved  in  this  petition  is  fully

covered by the aforementioned judgment of the Division Bench

which was confirmed by this Court in Civil  Appeal Nos. 7305-

7306 of  2003 disposed of on 17th January 2006, wherein it  is

observed  that  the  findings  on  the  Mala  fides  of  the  State

Transport Authority (STA) are clearly borne out from the records

seen by the Tribunal.  In the said case the route involved was a

notified  route,  as  involved  in  this  matter,  i.e.  11  kilometers’

stretch  lying  between  Dewal-Bijnor.  In  Civil  Appeal

Nos. 7305-7306 of 2003, this Court had confirmed the Order of

the High Court by which 48 permits of the State Route issued by

the  State  Transport  Authority  on  the  route  in  question  were

cancelled.

Per contra, the Learned Counsel appearing on behalf of the

operators/respondents  contended  that  they  are  the  existing

operators and therefore they are protected under the scheme of

the notified route including the portion between Dewal-Bijnor.

4. For  the  purpose  of  convenience,  the  facts  in  brief  are

gathered from Civil Appeal arising from SLP Civil No. 35947 of

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2010. The facts of the case in brief are that the respondents in

SLP (C) No.35947 of 2010 are holders of regular state carriage

permits awarded by the State Transport Authority on the route

known  as  Meerut-Mawana-Behsuma-Meeranpur-Bijnore  via

Dewal Bridge. The permits were granted in favour of the some of

the respondents on 4/5-9-1989 and to certain other respondents

on 11.5.1994. Meerut-Bijnore was a non-notified route when the

permits were granted to the respondents, so also the other route

Muzaffarngar-Bopa-Morna-Revali  Ghat-Bijnore  was  a

non-notified  route  when  the  permits  were  granted  to  the

respondents.    Muzaffarnagar-Bhopa-Morna-Revali-Ghat-Bijnore

route came into existence in 1960 and the operators on the said

route had to cover the route through a pantoon bridge which had

been constructed on Revali  Ghat.   The Scheme under  Section

68-C of the Motor Vehicles Act, 1939 was published in the year

1962 in respect of the concerned route.  However, on 15.11.1977,

the Scheme in respect of another route under Section 68-C of the

Motor Vehicles Act, 1939 was also published.

5. A pucca bridge was constructed at Dewal in the year 1985

for crossing the Ganga River.  In view of the said development,

another  route  i.e.,  Muzaffarnagar-Bijnore  was  diverted  as

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Muzaffarnagar-Bhopa-Morna-Bera Sadat to Bijnore.  Thereafter

21 permits  were  granted by  the  Regional  Transport  Authority,

Meerut vide order dated 4/5-9-1989 and one permit was granted

vide order dated 17.5.1990 which had been challenged before the

State Transport Appellate Tribunal, the High Court as well as in

this Court.  This Court vide its judgment dated 10.5.1993 in SLP

(C) No.6625 of 1993 upheld those 21 permits.

6. Subsequently major developments had taken place, as a

result  of  which  the  Muzaffarnagar-Bijnore  route  had  been

diverted  to  Muzaffarnagar-Jansath-Meeranpur-Dewal  Barrage-

Bijnore, and in that regard a scheme was published.  Pursuant to

the newly published scheme, the Regional Transport Authority,

Meerut took decisions in its meetings held on 08.05.1995 and

02.06.1995 that the permits granted in pursuance of the scheme

dated 03.09.1994 will remain in operation.  In respect of permits

granted  prior  to  03.09.1994  by  Regional  Transport  Authority,

Meerut  after  coming  into  force  of  the  Notification  dated

03.09.1994, it was said to have been clarified by the High Court

in  Civil  Misc.  Petition  No.  37607  of  1995  vide  order  dated

03.03.1997 with regard to the operation of buses on the portion

between Dewal-Bijnore.  It is relevant to mention herewith that

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the State Transport Authority, U.P. Lucknow granted 48 permits

vide order dated 29.9.1989 under the route in question.  The said

order was challenged in Revision No.68 of 1999 before the State

Transport Appellate Tribunal which came to be allowed by the

judgment dated 23.10.2002.  Consequently, the order passed by

the State Transport Authority dated 29.09.1989 was set aside, in

effect  thereto,  the  48  permits  granted  by  the  State  Transport

Authority on the route in question stood cancelled. Aggrieved by

the order of the State Transport Appellate Tribunal, the permit

holders  filed Civil  Misc.  Writ  Petition No.46223 of  2002 (titled

M.K. Jain and 27 others vs. State Transport Appellate Tribunal,

U.P. Lucknow) as well as Civil Misc. Writ Petition No. 48624 of

2002  (Smt.  Kanchan  &  Ors.  Vs.  State  Transport  Appellate

Tribunal & Ors.). These writ petitions were dismissed by the High

Court  on  04.04.2003.   The  judgment  of  the  High  Court  was

confirmed by this Court in Writ Petition No.7306 of 2003 (Smt.

Kanchan & Ors. Vs. State Transport Appellate Tribunal & Ors.)

on  17.1.2006.  In  effect,  48  permits  granted  on  the  route  in

question stood cancelled.

7. In  the  meanwhile,  the  Regional  Transport  Authority,

Meerut  had  issued  show  cause  notices  on  26.12.2005  to  the

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respondents as to why the permits granted in their favour should

not be cancelled in view of the another judgment of this Court

dated 05.04.2005 in Civil Appeal Nos. 6716-6818 of 1999 (titled

U.P. State Road Transport Corporation vs. Omaditya Verma and

Ors., 2005 (4) SCC 424).   As mentioned supra, the Civil Appeal

No. 7306 of 2003 was heard by this Court and was dismissed on

17.1.2006 confirming the  judgment  passed by  the  High Court

cancelling the 48 permits.  This Court concluded that the State

Transport Authority while granting 48 permits as per order dated

29.9.1989 on the route in question has mala-fidely exercised its

jurisdiction.

8. Pursuant  to  said  judgment  of  this  Court,  the  Regional

Transport  Authority  as  well  as  the  State  Transport  Authority

cancelled the permits of the respondents after hearing them.  The

orders of the Regional Transport Authority as well as the State

Transport Authority were questioned by the respondents before

the High Court of  Judicature at Allahabad in W.P. No.2161 of

2007 which was allowed by the judgment dated 30.7.2010 and

the same is impugned in these appeals.

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9. This  Court  on  facts  has  ruled  in  the  aforementioned

judgments particularly in Civil Appeal No.7306 of 2003 that the

route in question is a notified route and therefore the permits

granted for the same route are bad in law.  It is also concluded by

this  Court  in  the  case  of  Smt.  Kanchan  &  Ors.  Vs.  State

Transport  Appellate  Tribunal  &  Ors.  (Civil  Appeal  No.7306  of

2003)  that  the  exercise  of  jurisdiction  by  State  Transport

Appellate Tribunal in granting 48 permits is mala fide exercise of

power based on the judgment of this Court. The action was taken

by  the  Regional  Transport  Authority  as  per  law  issuing

show-cause notices etc. for getting 25 permits cancelled which

were issued after the year 1985 as was done by this Court in Civil

Appeal Nos. 7305-7306/2003. The Regional Transport Authority

had rightly cancelled the permits issued on the ground that the

route Dewal to Bijnore is a notified route.   

10. The Allahabad High Court in the aforementioned judgment

in detail on facts had dealt with as to how the private operators

were not entitled to ply their vehicles on the notified route i.e. 11

kilometers’ stretch lying between Dewal to Bijnor.  Though the

respondents herein were existing operators they cannot be shown

leniency in view of the fact that the route over which they were

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plying earlier did not include Dewal to Bijnor.  Since they have

now been plying the vehicles on the notified route Bijnor-Dewal

they cannot be permitted to do so.  Though the judgment of the

Division  Bench  of  Allahabad  High  Court  mentioned  supra  is

confirmed by this Court in Civil Appeal Nos. 7305-7306 of 2003

on different grounds, the fact remains that the judgment of the

Allahabad High Court stood confirmed.  Hence, in our opinion,

the  State  Transport  Authority  is  justified  in  relying  upon  the

judgment  of  Allahabad  High  Court  mentioned  supra  in  Civil

Miscellaneous Writ Petition no. 48624 of 2002 and the judgment

of this Court in Civil Appeal Nos. 7305-7306 of 2003 inasmuch

as  the  very  route  in  question  that  were  Dewal-Bijnor  was  a

subject matter.

11. It is well settled law and it is reiterated by this Court in the

case  of   U.P.  State  Road  Transport  Corporation  vs.  Omaditya

Verma and Ors.,  2005 (4)  SCC 424 that  the private  operators

cannot be permitted to ply the vehicles on notified/nationalized

route unless permitted by the Scheme.   The High Court while

passing the impugned judgment had not properly appreciated the

impact of the judgment of this Court in the case of U.P. State

Road Transport Corporation vs. Omaditya Verma and Ors., 2005

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(4) SCC 424.  After construction of Ganga Barrage in the year

1985;  after  diversion  of  both  the  routes  i.e.

Muzaffarnagar-Bijnore  and  Meerut-Bijnore,  the  common  strip

from Dewal to Bijnore i.e. for a portion of 11 km. is being used.

As  the  route  has  become  a  notified  route  pursuant  to  the

Nationalization  Scheme  dated  05.11.1997,  and  since  it  is  a

settled principle of law that no private operators can be permitted

to operate/ply vehicles on the notified route except as permitted

by the Scheme, the respondents cannot be permitted to ply the

vehicles on the notified route.

12. It would also be relevant to note the conclusions reached by

the Constitution bench in the Case of G. T. Venkataswamy Reddy

vs State Transport Authority & Ors. (2016) 8 SCC 402 which are

as under:

“Having  analysed  the  above  referred to decisions and the statutory provisions, before  rendering  our  final  answer  to  the question  referred  to  this  Constitution Bench,  it  will  be  worthwhile  to  make  a reference and list out the legal propositions which we are able to discern based on our detailed consideration in this reference:

   (a) Chapter  IV-A  supersedes  any inconsistent provisions in Chapter IV. (b) The  policy  of  the  Legislature  is  clear from Section 68-C that the State Transport Undertaking may initiate a scheme for the

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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. (c) Grant of variation under Section 57(8) will be as good as grant of a new permit. (d) Section 57(8)  is  controlled  by  Section 68FF falling under Chapter IV-A, by virtue of  the  superseding effect  of  Section 68-B also falling under Chapter IVA. (e) Once  a  scheme  formulated  under Section 68-D gets approved under 68-D(3) of Chapter IV-A, then all the permits in the route / area covered by the scheme will get frozen  by  virtue  of  operation  of  Section 68-FF. (f) The  effect  of  Section  68-FF  can  be altered / modified / cancelled only in the manner  as  provided  for  under  Section 68-E and in no other manner. (g) 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. (h) 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 68-FF. (i) The proposition of law, laid down by this Court  in  ‘JAYARAM’  impliedly  stood overruled in ‘ADARSH TRAVELS’. (j) 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.

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(k) 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. (l) 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. (m) 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). (n) 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).

Having  regard  to  the  above propositions,  which we are able  to arrive at, we hold that the judgment reported in Karnataka  State  Road  Transport Corporation,  Bangalore  Vs.  B.A.  Jayaram and others - 1984 (Supp) SCC 244 is no longer  a  good  law  and  the  decision reported  in  Pandiyan  Roadways

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Corporation  Ltd.  Vs.  M.A.  Egappan  - (1987) 2 SCC 47 stands approved which is in  tune  with  the  Constitution  Bench decision  reported  in  Adarsh  Travels  Bus Service and another Vs. State of U.P. and others  -  (1985)  4  SCC  557  and  the observations made in R.Raghuram Vs.  P. Jayarama Naidu and others – 1990 (supp) SCC 361 stands approved.”

Aforementioned  conclusions  are  applicable  to  the  facts  of

this  case.  The  Constitution  bench  while  coming  to  the

aforementioned conclusions has considered various judgments on

the point including in the case of Adarsh Travels Bus Service vs

State of U.P. and Others (1985) 4 SCC 557 (Constitution Bench

Judgment) etc.

13. Having  regard  to  the  totality  of  the  facts  and

circumstances of the case, we are of the considered opinion that

the High Court is not justified in setting aside the orders passed

by the State Transport Appellate Tribunal and Regional Transport

Authority.  Particularly,  when  the  matter  is  covered  by  the

judgment  of  this  Court  in  Civil  Appeal  Nos.  7305-7306  of

2003decided on 17.1.2006 cancelling 48 permits on the route in

question. Accordingly, the impugned judgment of the High Court

is set aside, the judgment and orders of the Regional Transport

Authority as well as of the State Transport Appellate Tribunal are

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restored.   Consequently,  Civil  Appeal  arising  out  of  SLP(C)

No.35947 of 2010 is allowed and Civil Appeal arising out of SLP

(C) No. 69 of 2011 stands dismissed.  No costs.   

        …………………………………….J.          [ARUN MISHRA]

            ……………………………………..J.                     [MOHAN M. SHANTANAGOUDAR]

New Delhi. September 05, 2017.