KARNATAKA STATE ROAD TRANSPORT CORPORATION v. ASHRUFULLA KHAN AND ORS

Citation: [2002] 1 S.C.R. 194

Court: Supreme Court of India

Bench: V.N. KHARE, ASHOK BHAN

Judgment text

KARNATAKA STATE ROAD TRANSPORT CORPORATION v. ASHRUFULLA KHAN AND ORS. JANUARY 14, 2002 [V. N. KHARE AND ASHOK BHAN, JJ. ) Motor Vehicles Act, 1939: Chapter IVA-Sections 68C, 68D-State carriage route permit-Grant of-Scheme totally excluding private operators from plying on notifiedroute- Existing operators whose permits overlap the notified portions to be rendered ineffective for the overlapping portions-When private operators traverse on the lines ofnotified route to continue journey on a non-notified route-Such traversing on a notified route cannot be regarded as intersection-Also such overlapping cannot be sustained as it relates to small portion or portions falling within the limits of a town or a village on a nationalised route. 'Intersection' and 'overlapping'-Distinction between-Explained Constitution of India, 1950-Article 226-Powers of High Court to enforce Rule of law-Not to pass order or direction contrary to what has been injuncted by law.

Words & Phrases : Intersection-Meaning of in the context of Motor Vehicles Act, 1939. Mysore State Transport Undertaking framed a scheme for exclusive plying of its vehicles by the Undertaking on the routes falling within the scheme. Scheme provided that the State Transport Undertaking shall operate services on all the routes to the complete exclusion of private operators except that the existing permit holders on the interstate route may continue to operate on such inter-State route, subject to condition that their permits shall be rendered ineffective for the overlapping portions of the notified routes. Transport Authority invited applications for grant of state carriage permit on a particular route. Respondent No. 1 submitted an application for the same. However, appellant-Corporation filed objection against the proposed grant of permits as the said route overlapped portions ofthe notified route falling within KARNATAKA STATE ROAD TPT. CORPN. v. ASHRUFULLA KHAN 195 the Scheme.

The objection was overruled. Appellant-Corporation was successful before the Tribunal and Single Judge of the High Court, but was . ,, unsuccessful before the Tribunal when the matter was remanded to it by the Division Bench after the Full Bench gave its opinion. Allowing the appeals, the Court HELD: 1. 1. The object and scheme behind Chapter IVA of the Motor Vehicles Act, 1939 make it clear that once a scheme for total exclusion of private operators for a route formulated by a State Transport Undertaking is approved by the government and is published in the official gazette, no permit can be granted to private operators other than the State Transport Undertaking on a notified route or portion thereof except in terms of the scheme. (200-C-D) Commissioner ofIncome Tax, Bangalore v. Venkateswara Hatcheries (P) Ltd. , (1999) 3 SCC 632 and Adarsh Travels Bus Service and Anr. v. State of UP. & Ors. , [1985) 4 SCC 557, followed. C. P. C. Motor Service v. State ofMysore, [1962) Suppl.

1 SCR 717 and Mysore State Road Transport Corporation v. Mysore State Transport Appellate Tribunal, (1975) 1 SCR 615, relied on. Webster's Dictionary, Vol-I; Black's Dictionary of Law, Fifth Edn. ; Chambers English Dictionary; The Law Lexicon Reprint Edn. , (1987) and The Shorter Oxford English Dictionary, Vol. I, referred to. 1. 2. There is a clear and obvious distinction between an 'overlapping' and an 'intersection' for purposes ofChapter IVA ofthe Motor Vehicles Act, 1988. In the case of an overlapping a stage carriage is to ply on the same line of travel on a portion of a notified route and it is immaterial whether it is small distance of four or five kilometres falling within the limits of a village or town. Whereas in the case of an intersection a non-notified route only cuts across a notified route.

The exceptions sought to be made by Full Bench in the form of municipal limit or village limit is totally erroneous and that the same defeats the very object behind the scheme which is for total exclusion of private operation. The consistent view ofthis Court has throughout been that the scheme is a law and the same has to be preserved and protected in public interest. Any other view taken contrary to the said view would amount to violating the integrity ofan approved scheme under Section 68D of the Act. Any slight deviation in the scheme may frustrate the entire Scheme. Therefore, High Court under Article 226 of the Constitution is required to enfon:e Rule of Law and not pass order or direction which is contrary to what .. has been injuncted by law. (206-C-D-E) ,. 1. 3. Merely because a private operator has to traverse on the line of a notified route for 5Km. or for 1. 5 Km. only is no ground to dispense with the mandate of law.

Such an overlapping also cannot be sustained on the ground it relates to a small town. If such a view of law as propounded by the Full Bench of the High Court is to be accepted, it is difficult to be applied where a notified route passes through bigger towns where involvement is of IO to 20 km. within that town. [206-G-H; 207-A] 1. 4. The view taken by the said Full Bench that where traversing on a notified route is necessary to continue journey on a non-notified route could be regarded as an intersection, is an erroneous view of law. It is contrary to the law which stood settled by this Court in Adarsh Travels case* that once a scheme is for total exclusion prohibiting private operators from plying stage carriages on a whole or part ofa notified route, no permit can be granted on the notified route or portion thereof, and still holds the field and, therefore, it deserves to be set aside. [207-B-C) Adarsh Travels Bus Service and Anr. v. State ofUP. & Ors. , [1985) 4 sec 557, followed.

H. C. Narayanappa v. State ofMysore, [1960) 3 SCR 742; Nehru Motor Transport Co-operative Society v. State ofRajasthan and Anr. , [1964) l SCR 220; C. P. C. Motor Service v. State of Mysore, [1962) Suppl. l SCR 717; Nilkanth Prasad v. State ofBihar, (1962) Suppl. l SCR 728; S. Abdul Khader Saheb v. Mysore Revenue Appellate Tribunal, [1973) l SCC 357; Mysore State Road Transport Corporation v. Mysore State Transport Appellate Tribunal, [1975) l SCR 615; Ram Sanehi Singh v. Bihar State Road Transport Corporation, [1971) 3 SCC 797 and Mysore State Transport Corporation v. Mysore Revenue Appellate Tribunal, [1975) l SCR 493, referred to. 2. The need and convenience of the travelling public is of paramount consideration under the Act. A situation may arise when the Transport Undertaking may be found not catering to the needs of the travelling public.

In such a situation on representation of travelling public, the State Undertaking or the Government, as the case may be, may consider the matter and provide adequate transport services if it is required. In case the Government finds that the Undertaking lacks vehicles or other infrastructure to provide an efficient and well coordinated transport services to the travelling KARNATAKA STATE ROADTPT. CORPN. 1•. ASHRUFULLAKHAN [V. N. KHARE, I. ] 197 public, it may modify the scheme as to permit private operator to ply vehicles on such route or routes. In any case, it is always permissible to the legislature to amend law by providing private operators to run an efficient and well coordinated transport services on such route or routes on payment of adequate royalty to the State Government. (207-C-D-EI CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1341 of 1990. From the Judgment and Order dated 16. 11. 88 of the Karnataka High Court in W. A. No. 403of1988. r G. L. Sanghi, K. R. Nagaraja, N.

D. B. Raju, Ms. Bharathi R. , Ms. Rizwana Parveen, M. R. V. Achar, G. Prabhakar, Ms. Kiran Suri, S. R. Bhat and Sanjay R. Hegde for the appearing parties. The Judgment of the Court was delivered by V. N. KHARE, J. In this group of appeals, the question that falls for our consideration is "whether small portion or portions falling within the limits of towns or villages on a notified route under Chapter IVA of Motor Vehicles Act, 1939, since repealed (hereinafter referred to as 'the Repealed Act'), are to be treated as a route overlapping or intersection" ? Learned counsel for the parties have addressed arguments only in Civil Appeal No. 1341/90 which substantially arises out of the judgment ofthe Full Bench ofKarnataka High Court rendered in Writ Appeal No. 403/1988. Learned counsel for the parties jointly prayed to examine the correctness of the aforesaid judgment of the Full Bench and the decision in Civil Appeal No. 1341/1990 would govern the fate of other cases.

We accordingly notice the facts which have given rise to Civil Appeal No. 1341/1990. As far back in the year 1966, the then Mysore State Transport Undertaking (hereinafter referred to as the Undertaking) framed a scheme under Section 68-C of the Repealed Act known as Kolar Pocket Scheme (in short 'the Scheme'), for exclusive plying of the vehicle by the Undertaking on the routes falling within the Scheme. The erstwhile Mysore government, after having considered the Scheme as proposed, and the representations filed against the said Scheme, approved the Scheme under Section 680 ofthe Repealed Act and the said approved Scheme was published in Government Gazette dated January 10, 1968. The Scheme provided that the State Transport Undertaking shall operate services on all the routes to the complete exclusion '( of other private operators except that the existing permit holders on the inter- ..

State route may continue to operate on such inter-State route, subject to conditions that their permits shall be rendered ineffective for the overlapping • portions of the notified routes and that the existing operators whose permits overlap the notified portions between Bagepalli to Chelur and Pathpatya Cross only may continue to operate on such routes subject to conditions that their permits would be rendered ineffective for the overlapping portions. However, in the years 1984-85, the Regional Transport Authority, Kolar invited applications under Section 57(2) of the Repealed Act for grant of stage carriage permit on route known as Kanumanahally to Bagarpet. Respondent No. I herein, in response to the said invitation submitted an application for grant of stage carriage permit on the said route.

The appellant herein - the Kamataka State Road Transport Corporation, filed an objection against the proposed grant ofpermits on the premise that the said route overlaps portions ofthe notified route falling within the Kolar Pocket Scheme, from Kolar Gold Field to Five Light Cross to an extent of 5 kilometer and Desihalli to Bagarpet to an extent of 1. 5 kilometer. It was urged before the Regional Transport Authority that the Scheme being of complete exclusion of private operators, no permit could be granted on the said portion ofthe notified route. However, it was contended on behalf of the respondent that overlapping two portions of the notified route should be construed as intersection and not overlapping and, therefore, the permit can be granted. The Regional Transport Authority, by its resolution dated 4. 3. 85 overruled the objections of the appellant herein and granted stage carriage permit in favour of the respondent.

Aggrieved against the order of the Regional Transport Authority, the appellant filed an appeal before the State Transport Appellate Tribunal, Bangalore. The Appellate Tribunal, after having found that the Scheme being for total exclusion of the 'I' private operators, no permit can be granted on the notified route or portion thereof, and in that view of the matter the appeal preferred by the appellant was allowed and the grant of permit in favour ofthe respondent was set aside. The respondent thereafter preferred a writ petition before the High Court of Karnataka challenging the order ofthe Appellate Tribunal. The Learned Single Judge ofthe High Court dismissed the writ petition. The respondent thereafter preferred a writ appeal before a Division Bench of the High Court. The Division Bench, after hearing of the matter was of the view that the question involved in the appeal required to be decided by a Full Bench.

Consequently, the question "whether small portion or portions falling within the limits of a town or village on a nationalised route, are to be treated as a route overlapping or intersection" was referred to a Full Bench ofthe High Court for its opinion. The Full Bench, by its opinion dated 21. 7. 88, answered the question as KARNATAKA STATEROADTPT. CORPN. 1•. ASHRUFULLA KHAN (V. N. KHARE,J. l 199 follows: "A small portion/portions falling within the limits of a town or a village on a nationalised route (notified route) are to be treated as only an intersection of the nationalised route and not as overlapping and therefore, it is permissible to grant permit on the route. " The Full Bench accordingly remitted its opinion to the Division Bench of the High Court.

The Division Bench, in view of the opinion given by the Full Bench allowed the writ appeal and set aside the judgment of the Learned Single Judge and remanded the matter to the Appellate Tribunal for considering the matter afresh in the light of the opinion given by the Full Bench. The Appellate Tribunal, following the Full Bench decision dismissed the appeal preferred by the appellant. Consequently, the appellant has filed the appeal by way of Special Leave Petition. It is in this way these matters have come up before us. Before we advert to the question which we are required to answer, it is necessary to notice the relevant law as regard the consequences which follow ·.. ,_ when a Scheme for total exclusion is prepared and finalised under Chapter IVA of the Repealed Act as it stood when the Full Bench of the High Court decided the matter and still continues to be a good law till date. Every citizen in this country is entitled to carry on a business in transport for hire or reward.

However, it is subject to the law enacted in respect thereof. The Repealed Act regulated the business of plying of stage carriages for carrying passengers. Chapter IVA of the Repealed Act also provided for nationalisation of road transport services. Section 68-C falling in Chapter IVA provided that the State Transport Undertaking may prepare a Scheme for purpose of providing an efficient, adequate, economical and properly coordinated road transport service to be run and operated by the Undertaking in relation to an area or route or portion thereof. The Scheme so proposed may be to the complete exclusion or partial, for other person. The scheme so framed was required to be published in the official gazette as to invite objections to the proposed Scheme from travelling public or the existing transport operators.

Sub-section (I) of Section 68D provided that any person already providing transport facilities on the proposed route by any means, any association representing persons interested in providing road transport facilities, any local authority or police authority within whose jurisdiction any part of the area or route proposed to be covered by the scheme lies, may file objections to the proposed Scheme before the State Government. Sub-section (2) of the Section 68D provided that the State Government after considering the objections may approve or modify the scheme. Sub-section (3) of Section 68D further provided that the scheme as approved or modified, to be published in the official gazette and on publication in the gazette, the Scheme shall become final and shall thereafter be called the approved scheme.

Section 68F empowered the Regional Transport Authority or the State Transport Authority, as the case may be, to grant to the State Transport Undertaking the necessary permit on its applying for the same in pursuance of an approved Scheme. Section 68FF further provided that where a scheme has been published under sub-section (3) of Section 68D in respect ofany notified area or notified route, ' the State Transport Authority or the Regional Transport Authority, as the . case may, shall not grant any permit except in accordance with the provisions ofthe Scheme. The consequences of an approved Scheme under Chapter IVA was that if the Scheme was for total exclusion, no person other than the State Transport Undertaking can operate on the notified route or area except as provided in the scheme itself.

Jn other words, after the approved scheme under Chapter IVA came into force, which is for total exclusion, no permit can be granted to a private operator to operate his vehicle on any part or portion on a notified area or route unless permitted by the terms of the Scheme itself. It is not disputed that the present Scheme is for total exclusion of private operators on the notified route or portion thereof. In H. C. Narayanappa v. State ofMysore, [1960] 3 SCR 742, a Constitution Bench of this Court held that a scheme framed and approved under Chapter IVA of the Repealed Act is law within the meaning of Article 13 and 19(6) of the Constitution. It excludes the private operators from notified routes or areas if it is for total exclusion ofprivate operators. In Nehru Motor Transport Co-operative Society v. State ofRajasthan and Anr. , [1964] l SCR 220, another Constitution Bench · of this Court held that once a Scheme was finally approved and published in the gazette, it is a law and final.

In C. P. C. Motor Service v. State ofMysore, [1962] Suppl. I SCR 717, a Scheme prepared by the State Transport Undertaking which was duly approved provided that the State Undertaking shall operate services to the complete exclusion of other private operators - (i) on all the notified inter-district routes except in regard to the portions of inter-district routes lying outside the limits of Mysore District and also (ii) over the entire length of each of the inter-district route lying within the limits of Mysore District. The private operators who, on the basis of perm its granted to them were plying their vehicles on inter-district and on inter-State routes which overlapped the Mysore District challenged the Scheme and argued that their permits should not be affected merely because parts of the routes were within KARNATAKA STATE ROADTPT. CORPN. 1•. ASHRUFULLA KHAN [V. N. KHARE,J. j 201 the Mysore District.

It was also urged that since the tennini of their routes on which they were plying their vehicles were outside Mysore District, it could not be held that any portion of their route had been taken over under the aforesaid Scheme merely because it lay within the Mysore District. The said contention was rejected by this Court and it was held that no private operator could be allowed to ply his vehicle on the notified portions which was within the Mysore District. In Nilkanth Prasadv. State ofBihar, [1962] Suppl. I SCR 728, this Court held thus: "This means that even in those cases where the notified route and the route applied for run over a common sector, the curtailment by virtue ofthe notified scheme would be by excluding that portion ofthe route or, in other words, the 'road' common to both.

The distinction between 'route' as the notional line and 'road' as the physical track disappears in the working of Chapter IVA, because you cannot curtail the route without curtailing a portion of the road, and the ruling of the Court to which we have referred, would also show that even if the route was different, the area at least would be the same. The ruling of the Judicial Committee cannot be made applicable to the Motor Vehicles Act, particularly Chapter IVA, where the intention is to exclude private operators completely from running over certain sectors or routes vested in State Transport Undertakings. In our opinion, therefore, the appellants were rightly held to be disentitled to run over those portions of their routes which were notified as part of the scheme. Those portions cannot be said to be different routes, but must be regarded as portions of the routes of the private operators, from which the private operators stood excluded under Section 68F (2)(c) (iii) of the Act.

" In S. Abdul Khader Saheb v. Mysore Revenue Appellate Tribunal, [1973] 1 SCC 357, it was held by this Court that once a scheme is for total exclusion of operation of stage carriage services by operators other than the State Transport Undertaking, the authorities cannot grant pennit under Chapter IV of the Motor Vehicle Act on any portion of a notified route. In Mysore State Road Transport Corporation v. Mysore State Transport Appellate Tribunal, [1975] 1 SCR 615, it was held that it is not pennissible to grant pennit on a portion of a notified route which has an effect to ply a stage carriage on the same line of the notified route excepting an intersection. However, in Ram Sanehi Singh v. Bihar State Road Transport Corporation, [1971] 3 sec 797, there was a slight shift from the established view of law in regard to the consequence of an approved Scheme under . ,. Chapter IVA.

In the said case, a private operator had a permit on a route which has overlapping of 5 miles on a notified route. On examination of the Scheme this Court found that the Scheme does not show that the private operators have been prohibited from plying their vehicles and, therefore, took a view that since the private operator has a corridor restriction ofoperation of5 miles on notified route, his permit to that extent of overlapping portion could be said to be ineffective. In Mysore State Transport Corporation v. Mysore Revenue Appellate Tribunal, [I 975] I SCR 493, it was held that a mere physical overlapping of two routes - notified rout~ and inter-State route, is not enough to exclude the private inter-State operators by any necessary implications. Such an exclusion must be made clear and unequivocal in the Scheme. Since there was a conflict between the two sets of decisions rendered by this Court in Ram Sanehi Singh v.

Bihar State Road Transport Corporation (supra), Mysore State Road Transport Corporation v. Mysore State Transport Appellate Tribunal (supra) and Mysore State Transport Corporation v. Mysore Revenue Appellate Tribunal (supra), the matter was referred to a Constitution Bench ion this Court has explained what the expression 'intersection' meant. Further this Court in the said decision in very clear tenns indicated that in view of consistent view of this Court no permit can be granted to operate on a notified route or portion thereof if a scheme prohibit ~ such operation by a private operator and the only exception is where a private operator holding permit on non-notified route has to intersect a notified route. This decision explained that an intersection of a notified route does not amount to traversing or overlapping the notified route because of the prohibition contain in a scheme applies to a whole or part of the route on the highway on the same line ofthe route.

It was further clarified that an intersection cuts across the notified route and does not permit traversing the same line of travel on a notified route. The last line of the passage extracted from decision in Mysore State Transport Corpn. (supra) is very relevant and T explains what this Court meant by the expression 'intersection'. The meaning assigned to it is that an intersection is not traversing the same line of travel but it cuts across. In other words if the vehicle is to ply on the same line of travel on a notified route it is an overlapping and if a non-notified route cuts across a notified route for its onward journey it is an intersection. The expression 'intersection' has been employed by this Court only to provide facility to a private operator operating on a non-notified route to continue an onward journey if it cuts across a notified route.

It appears that this exception was carried out only to avoid hardships to the travelling public, otherwise a Scheme which is for total exclusion of private operation was held to be untouchable. In our opinion, there is a clear and obvious distinction between an 'overlapping' and an 'intersection' for purposes of Chapter IVA ofthe repealed Act~ In the case of an overlapping a stage carriage is to ply on the same line of travel on a portion of a notified route and it is immaterial whether it is a small distance of four or five kilometers falling within the limits of a village or town. Whereas in the case of an intersection a non-notified route only cuts across a notified route for onward journey. It is only to enable a private operator plying on a non-notified route to a non-notified route to cut across notified route.

The exceptions sought to be made by Full Bench in the form of municipal limit or village limit is totally erroneous anJ that the same defeats the very object behind the scheme which is for total exclusion of private operation. The consistent view of this Court has through out been that the Scheme is a law and the same has to be preserved and protected in public interest. Any other view taken contrary to the said view would amount to violating the integrity of an approved scheme under Section 68D of the Repealed Act. Any slight deviation in the scheme may frustrate the entire Scheme. An example posed by the Full Bench in its judgment as to what happens when an operator on a non-notified route has to cut across a notified route by taking 'U' tum on a notified route and then taking left tum to enter on non-notified route was not appropriate. In such a case, it may not amount to overlapping. It would be only intersection.

There may be a crossing where there is an island in the centre and a private operator in order to go from nonnotified route to another non-notified route has to make a semi circle of a notified route. In that case also, it would be not overlapping, but it would be an intersection because it only cuts across the notified route because of size of crossing or traffic regulations. Merely because a private operator has to traverse on the line of a notified route for 5 km or for 1. 5 km only is no ground to dispense with the mandate of law. Such an overlapping also cannot be sustained on the ground it relates to a small town. If such a view of law as propounded by the Full Bench is to be accepted, it is difficult to be applied where a notified route 'y KARNATAKA STATE ROAD TPT. CORPN. 1-. ASHRUFULLA KHAN [V. N. KHARE. J. ) 207 passes through bigger towns where involvement is of 10 to 20 km within that town.

The view taken by the full bench that where traversing on a notified route is necessary to continue journey on a non-notified route could be regarded as an intersection is an erroneous view oflaw. The High Court under Article 226 of the Constitution is required to enforce rule of law and not pass order or direction which is contrary to what has been injuncted by law. For the aforesaid reasons, we are of the view that the view taken by the High Court was contrary to the law which stood settled by this Court in Adarsh Travels case (supra) and still holds the field and, therefore, it deserves to be set aside. Before we part with the case, we would like to observe that the need and convenience of the travelling public is of paramount consideration under the Act. A situation may arise when the Transport Undertaking may be found not catering to the needs of the traveling public.

In such a situation, on representation of travelling public, the State Undertaking or the Government, as the case may be, may consider the matter and provide adequate transport services if it is required. In case the Government finds that the Undertaking lacks vehicles or other infrastructure to provide an efficient and well coordinated transport services to the traveling public, it may modify the scheme as to permit private operator to ply vehicles on such route or routes. In any case, it is always permissible to the legislature to amend law by providing private operators to run an efficient and well coordinated transport .. services on such route or routes on payment of adequate royalty to the State Government. For the aforesaid reasons, the judgments and order including State Transport Appellate Tribunal under appeal are set aside.

The matters are sent back to the Learned Single Judge of the High Court to decide the matters within three months of production of certified copy of this judgment in the light of what has been stated above. The appeals are allowed. There shall be no order as to costs. N. J. Appeals allowed.