Supreme Court Limits Temporary Permits on Notified Routes: KSRTC vs. Baby P.P. (2018)

Date of the Judgment: May 16, 2018
Citation: 2018 INSC 434
Judges: Kurian Joseph, Mohan M. Shantanagoudar, Navin Sinha

Can a private bus operator get a temporary permit to run on a route already covered by the State Transport Undertaking (STU)? The Supreme Court recently addressed this question, clarifying the extent to which private operators can use notified routes. This judgment impacts the balance between state-run and private transport services.

The core issue revolves around the interpretation of Section 104 of the Motor Vehicles Act, 1988, and whether private operators can obtain temporary permits on routes where the STU already operates. The Court examined the interplay between the Act and the schemes formulated by the State Government for regulating transport services. The bench comprised Justices Kurian Joseph, Mohan M. Shantanagoudar, and Navin Sinha, with the majority opinion authored by Justice Shantanagoudar.

Case Background

The case involves a dispute between the Kerala State Road Transport Corporation (KSRTC), a State Transport Undertaking (STU), and several private stage carriage operators. The core of the issue is whether these private operators can obtain temporary permits to run services on routes already notified for and served by the KSRTC.

The State of Kerala, on 14.07.2009, issued a scheme under Section 100 of the Motor Vehicles Act, 1988, designating the Kottayam-Kozhikode route as a notified route. This scheme aimed to provide coordinated passenger road transport services, with the STU having priority. The scheme allowed existing private permits issued before 09.05.2006 to continue until their expiry, after which regular permits would be granted. However, for permits issued after 09.05.2006, only temporary permits were to be issued until the STU started new services on those routes. Private services were allowed to pick up and drop passengers only if their routes overlapped the notified route by a maximum of 5 kilometers or 5% of their route length, whichever is less, for intersection purposes.

Baby P.P., a private operator, applied for a temporary permit to operate on the Pallissery-Angamaly-Perumbavoor route, which is 28 km long. The Regional Transport Authority (RTA) rejected this application on 22.12.2015, noting that the 13 km stretch from Angamaly to Perumbavoor overlapped with the notified Kottayam-Kozhikode route, exceeding the permissible limit. Baby P.P. appealed to the State Transport Appellate Tribunal (STAT), which remanded the matter to the RTA to reconsider the application under the proviso to Section 104 of the Act. The KSRTC then challenged the STAT order in the High Court, which was ultimately dismissed, leading to the present appeals before the Supreme Court.

Timeline

Legal Framework

The case primarily revolves around the interpretation of the Motor Vehicles Act, 1988, specifically Sections 99, 100, and 104.

✓ Section 99 of the Act deals with the preparation and publication of proposals regarding road transport services of the STU. It states that if the State Government believes that road transport services should be run by the STU to the exclusion of private operators, a proposal should be published in the Official Gazette.

✓ Section 100(1) of the Act allows the State Government to invite objections to the proposal. After considering these objections, the State Government may approve or modify the proposals.

✓ Section 100(3) of the Act states that the approved or modified scheme will be published in the Official Gazette and newspapers, after which it becomes final.

✓ Section 104 of the Act restricts the grant of permits in respect of a notified area or route. It states:

“Where a scheme has been published under sub-section (3) of section 100 in respect of any notified area or notified route, the State Transport Authority or the Regional Transport Authority, as the case may be, shall not grant any permit except in accordance with the provisions of the scheme:”

The proviso to Section 104 states:

“Provided that where no application for a permit has been made by the State Transport Undertaking in respect of any notified area or notified route in pursuance of an approved scheme, the State Transport Authority or the Regional Transport Authority, as the case may be, may grant temporary permits to any person in respect of such notified area or notified route subject to the condition that such permit shall cease to be effective on the issue of a permit to the State transport undertaking in respect of that area or route.”

The Court also referred to the Road Transport Corporations Act, 1950, under which the appellant, KSRTC, is established as a State Transport Undertaking.

The Court noted that Chapter VI of the Act, dealing with special provisions for STUs, has an overriding effect over Chapter V and other laws, as per Section 98 of the Act.

Arguments

Appellant (KSRTC) Arguments:

• ✓ The appellant contended that no private operator can operate on a notified route except as provided in the scheme.
• ✓ The proviso to Section 104 of the Motor Vehicles Act, 1988, is subject to the scheme.
• ✓ Clause 5(c) of the scheme clearly states that the respondent’s route overlaps the notified route beyond the permissible limit.
• ✓ The appellant is operating a sufficient number of buses on the notified route.

Respondent (Private Operators) Arguments:

• ✓ The scheme does not render the proviso to Section 104 of the Motor Vehicles Act, 1988, ineffective.
• ✓ Temporary permits can be granted when the route is unserved or underserved by the STU.
• ✓ The appellant has failed to prove that it is operating a sufficient number of buses on the route for which the respondent has claimed a temporary permit.
• ✓ Temporary permits were issued even after the scheme came into force in 2009.
• ✓ The RTA had granted a temporary permit to the respondent after the STAT order.

The respondent argued that the STU was not adequately serving the route and that temporary permits were necessary to cater to the public’s needs. They also argued that the proviso to Section 104 allows for temporary permits when the STU is not operating on the route.

The appellant contended that the scheme clearly restricts private operators from overlapping on the notified route beyond the permissible limit and that the STU is already providing sufficient services.

The respondent relied on the fact that the RTA had granted a temporary permit after the STAT order, and the appellant had not challenged this order.

The appellant argued that the respondent was attempting to use the guise of public inconvenience to infiltrate the notified route, which is prohibited by the scheme.

The respondent argued that the scheme does not make the proviso of Section 104 ineffective and that temporary permits can be granted when the route is unserved or underserved by STU.

The respondent also argued that the appellant had failed to prove that it was plying a sufficient number of buses on the route and that three temporary permits were issued even after the scheme came into force in 2009.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Can a temporary permit be granted to a private stage carriage operator on a notified route (which is already being served by the STU) for a distance that exceeds the permissible limit provided under the scheme, that too not for intersecting but for merely traversing and consequently overlapping its service on the notified route?
2. Under the facts of this case, is it open for a private stage carriage operator (Respondent No.1) to operate the services overlapping more than 5 kms or 5% of the route of the private stage carriage operator (as specified under the Scheme) for the purpose of traversing by overlapping on the notified route which is being served by the STU, but not for purposes of intersection?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

✓ Adarsh Travels Bus Service and Anr. vs. State of U.P. and Ors. [(1985) 4 SCC 557]* – The Court relied on this case to emphasize the State’s power to create monopolies in transport services, including excluding private operators.

✓ Gajraj Singh and Others vs. State Transport Appellate Tribunal and others [(1997) 1 SCC 650]* – The Court used this case to support the view that an approved scheme is a law in itself, and private operators’ rights are frozen in the notified scheme.

✓ Dwarka Prasad vs. Dwarka Das Saraf [(1976) 1 SCC 128]* – This case was cited to clarify that a proviso must be read in relation to the main section and cannot be interpreted in isolation.

✓ U.P. State Roadways Transport Corporation vs. Anwar Ahmed and Others [(1997) 3 SCC 191]* – The Court used this case to emphasize that once a scheme is notified, private operators cannot claim permits except as per the scheme.

✓ Mysore State Road Transport Corporation vs. Mysore State Transport Appellate Tribunal [(1974) 2 SCC 750]* – This case was cited to clarify that if there is a prohibition to operate on a notified route, no licenses can be granted to any private operator.

✓ Karnataka SRTC vs. Ashrafulla Khan [(2002) 2 SCC 560]* – The Court used this case to explain that intersection is only to provide a facility to private operators to continue their journey by cutting across the notified route.

✓ U.P. SRTC and another vs. Sanjida Bano and others [(2005) 10 SCC 280]* – This case was used to emphasize that if the STU is operating on the notified route, others cannot claim the benefit of the proviso to Section 104.

✓ Punjab Roadways vs. Punjab Sahib Bus & Transport Co. [(2010) 5 SCC 235]* – This case was distinguished on facts, as it dealt with a scheme where routes were shared in a specific ratio, which is not the case here.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the need to uphold the integrity of the transport scheme and the rights of the State Transport Undertaking (STU). The Court emphasized that the scheme is a law by itself and that private operators cannot circumvent it by seeking temporary permits that exceed the permissible limits. The Court also highlighted the importance of ensuring that the STU’s monopoly over notified routes is protected, as this is in the public interest. The Court also noted that the proviso to Section 104 of the Motor Vehicles Act, 1988, cannot be interpreted in isolation from the main section and the scheme.

The Court was also influenced by the fact that the STU was operating a sufficient number of buses on the notified route. The Court rejected the argument that the proviso to Section 104 allows for temporary permits when the STU is not operating a sufficient number of buses, stating that the mere fact that the STU is operating on the route is sufficient to preclude others from taking the benefit of the proviso.

The Court also noted that the concept of intersection is different from traversing or overlapping a route. Intersection is only to provide a facility to private operators to continue their journey by cutting across the notified route, whereas overlapping is to ply on the same line to travel on a portion of the notified route.

The Court also took note of the fact that the respondent was seeking a temporary permit for a route that overlapped the notified route by 13 km, which was far beyond the permissible limit of 5 km or 5% of the route length.

The Court also highlighted that private operators often try to infiltrate notified routes under the guise of public inconvenience.

The Court was also influenced by the fact that the respondent was seeking a temporary permit for a route that overlapped the notified route by 13 km, which was far beyond the permissible limit of 5 km or 5% of the route length.

The Court also highlighted that private operators often try to infiltrate notified routes under the guise of public inconvenience.

Logical Reasoning

Key Takeaways

• ✓ Temporary permits for private stage carriage operators on notified routes are restricted by the stipulations of the scheme.
• ✓ The proviso to Section 104 of the Motor Vehicles Act, 1988, cannot be interpreted in isolation from the main section and the scheme.
• ✓ Private operators cannot claim temporary permits on notified routes where the STU is already operating, even if they claim the STU is not providing sufficient services.
• ✓ The concept of intersection is different from traversing or overlapping a route.
• ✓ Private operators cannot use the guise of public inconvenience to infiltrate notified routes.
• ✓ The scheme is a law by itself and must be protected in the public interest.

This judgment reinforces the importance of adhering to the schemes formulated by the State Government for regulating transport services. It also highlights the need to protect the rights of the STU to operate on notified routes. The decision is likely to impact future cases involving temporary permits for private operators on notified routes.

Directions

The Supreme Court set aside the judgment of the STAT, the consequent order of the RTA granting temporary permit to the respondent no. 1, as well as the judgment of the High Court. The appeals were allowed, and the temporary permit granted by the RTA on 23.02.2017 in favor of respondent no.1 was set aside.

Development of Law

The ratio decidendi of this case is that a temporary permit cannot be issued to a private stage carriage operator to traverse on a notified route which is being served by the STU, in excess of the permissible distance provided under the scheme. The Court clarified that the proviso to Section 104 of the Motor Vehicles Act, 1988, is subject to the scheme and cannot be interpreted in isolation. This decision reinforces the primacy of the scheme in regulating transport services and protects the rights of the STU to operate on notified routes.

This judgment clarifies the position of law by stating that even if the STU is not operating sufficient number of buses, the mere fact that it is operating on the route precludes private operators from taking the benefit of the proviso to Section 104 of the Act.

Conclusion

The Supreme Court’s judgment in Kerala State Road Transport Corporation vs. Baby P.P. & Ors. clarifies the limits on granting temporary permits to private stage carriage operators on notified routes. The Court held that private operators cannot obtain temporary permits to traverse on routes already being served by the State Transport Undertaking (STU) beyond the permissible limits specified in the scheme. The decision emphasizes that the scheme is a law by itself and that the proviso to Section 104 of the Motor Vehicles Act, 1988, cannot be interpreted in isolation from the main section and the scheme. The Court also clarified the distinction between intersection and overlapping of routes. This judgment reinforces the STU’s monopoly on notified routes and the importance of adhering to the transport schemes formulated by the State Government.