MV Act | Private Bus Operators Cannot Ply On Inter-State Routes Overlapping With Notified State Transport Routes: Supreme Court

The Supreme Court has held that private operators cannot be granted stage-carriage permits on inter-State routes under reciprocal transport agreements if any portion of those routes overlaps a notified intra-State route reserved for State transport undertakings under Chapter VI of the Motor Vehicles Act, 1988.

A Bench of Justice Dipankar Datta and Justice Augustine George Masih set aside the order of the Gwalior Bench of the Madhya Pradesh High Court, which had directed recognition of permits granted to Madhya Pradesh's private bus operators under the Inter-State Reciprocal Transport (IS-RT) Agreement between the Transport Departments of Madhya Pradesh and Uttar Pradesh, for the routes which overlaps with routes exclusively operated by UP State Road Transport Corporation.

The legal battle stemmed from an IS-RT Agreement from 2006 between Madhya Pradesh and Uttar Pradesh. The agreement allowed private operators to ply on certain routes (Schedule A), while others (Schedule B) were reserved for the Madhya Pradesh State Road Transport Corporation (MPSRTC).

When MPSRTC ceased operations on the route, private operators argued that the Schedule B routes should be opened to them. The Madhya Pradesh transport authority issued them permits, but its Uttar Pradesh counterpart refused to countersign them, leading to a series of lawsuits.

Aggrieved by the Madhya Pradesh High Court's decision, favouring the private operators, directing the UP-State Transport Authority to initiate proceedings to grant permanent stage carriage permits for the routes mentioned in Schedule B of the IS-RT to the MP's private operators, the UPSRTC, and the State of Uttar Pradesh moved to the Supreme Court.

Issue

The question was whether a private operator can be granted a stage carriage permit on an inter-State route based on an IS-RT Agreement when part of that route overlaps with a notified route covered by a scheme approved under Chapter VI of the Motor Vehicles Act

Decision

Answering in negative, the judgment authored by Justice Datta set aside the High Court's decision emphasizing that that an IS-RT Agreement is an "instrument" and not a law, and therefore cannot supersede a statutorily “approved schemes and notified routes, which are envisaged in Chapter VI,…and would prevail over an inter-State agreement in respect of an inter-State route.”

“an IS-RT Agreement is an agreement between two States and, therefore, not a law.”, the court held.

Since, the High Court's decision to grant state carriage permit to private operators to ply on routes overlapping with UPSRTC's route, was in violation of an arrangement made under Chapter VI, therefore “no permission can be granted at this stage to any private operator having a permit issued by the STA, MP to ply his vehicle on an inter-State route connecting two cities in the neighbouring States, which overlaps any notified intra-State route in the State of UP..”

The Court expressed concern over the "apparent lack of application of mind" by the states of Uttar Pradesh and Madhya Pradesh, whose poor coordination had frustrated the agreement and potentially inconvenienced the public.

“Once two States hold talks for formulating and opening up routes for plying of stage carriages connecting cities/towns in such States on reciprocal basis and reduce the agreed terms to a written agreement, which is also given wide publicity to remove any possible hurdles, there is a presupposition of various objects and purposes having been factored therein, which undoubtedly have serving public interest at the forefront. If the two reciprocating States fail to notice that the services to be introduced would face road-blocks because certain inter-State routes overlap a few intra-State routes, public interest is rendered a casualty and thereby, the whole object and purpose of the IS-RT Agreement would be frustrated and lost in the process.”, the court said.

Direction To Discuss Modalities For Allowing Private Operators To Ply On Inter-State Routes

The Court suggested an alternative to find a solution for making private operators to ply their vehicles on inter-state routes, upon ordering the Principal Secretaries of the Transport departments of both states to meet within three months to discuss modalities for fully working out the IS-RT Agreement.

The Court suggested the states consider measures like "partial exclusion" from the notified scheme, which could allow private inter-state buses to traverse the overlapping section without picking up or setting down passengers, thereby serving through-travelers without infringing on the UPSRTC's monopoly.

“To facilitate such an exercise, it would be desirable if the Principal Secretaries of the Transport Departments of the States of MP and UP, together with other responsible officers of the said departments, meet at a mutually convenient venue within 3 months from date to discuss the modalities for fully working out the IS-RT Agreement. If indeed, the transport authorities of the State of MP satisfy the transport authorities of the State of UP that the MPSRTC has been wound up or is on the verge of being wound up and, therefore, not in a position to ply stage carriages on the routes earmarked for it (Annexure B), appropriate decision may be taken to include the routes in Annexure B of the IS-RT Agreement in Annexure A thereof and measures taken to give effect to such inclusion. Needless to observe, such measures ought to be affected upon a consensus being reached for permitting private operators to ply on the inter-State routes originating from the State of MP and terminating in the State of UP and back. To what extent and, if at all, the interest of the UPSRTC needs to be protected and can be achieved is left to the discretion of the transport authorities of the States of UP and MP. In addition, so long few intra-State routes in the State of UP are notified in favour of the UPSRTC and portions thereof fall in the line of travel of stage carriages of certain inter-State routes, both the States may also consider the desirability of exploring whether partial exclusion of inter-State routes from the approved scheme [as referred to in Section 99 of the 1988 MV Act] can be permitted so as to further the interests of the passengers and the commuters. Should there be consensus, no time ought to be wasted for grant/issue of permits and countersignature thereof by the reciprocating State. In the unlikely event of absence of consensus between the two States to permit private operators to ply their vehicles as stage carriages from routes originating in the State of MP and terminating in the State of UP as well as the return trip from the State of UP to the State of MP, the State of MP shall also be at liberty to decide its future course of action keeping in mind that an IS-RT Agreement cannot be revoked without the consent of both the States. We reiterate, these being matters of policy, should be left to both the States to decide and we do hereby reserve it for their consideration.”, the court observed.

Cause Title: U.P. STATE ROAD TRANSPORT CORPORATION THROUGH ITS CHIEF GENERAL MANAGER VS. KASHMIRI LAL BATRA & ORS.

Citation : 2025 LiveLaw (SC) 1062

Click here to read/download the judgment

Appearance:

For Petitioner(s) :Ms. Shobha Gupta, Sr. Adv. Mr. Ankit Anandraj Shah, AOR Mr. Arpit Bamal, Adv. Mr. Vaibhav Pareek, Adv. Mr. Tarun Arora, Adv. Mr. Gitesh Marwah, Adv. Mr. B S Rajesh Agrajit, Adv. Ms. Priya Nagar, Adv. Mr. Siddharth Goswami, Adv. Mrs. Meetu Goswami, Adv. Ms. Shambhavi Jaiswal, Adv. Mr. Shyamal Kumar, AOR Ms. Apoorva Pal, Adv. Mrs. Garima Prashad, Sr. Adv. Mr. Nishit Agrawal, AOR Ms. Kanishka Mittal, Adv. Ms. Deepti Rathi, Adv. Ms. Nidhi Singh, Adv. Ms. Upasna Agrawal, Adv. Mrs. Upasna Agrawal, Adv. Mr. Shrey Kapoor, Adv.

For Respondent(s) :Ms. Shobha Gupta, Sr. Adv. Mr. Ankit Anandraj Shah, AOR Mr. Gitesh Marwah, Adv. Mr. Tarun Arora, Adv. Mr. Vaibhav Pareek, Adv. Mrs. Rani Chhabra, AOR Mr. Jay Veer Singh, Adv. Mr. Hiesh Kumar Sharma, Adv. Mr. Amit Kumar Chawla, Adv. Mr. Akhileshwar Jha, Adv. Ms. Swati Vishan, Adv. Mr. Vikal P. Gupta, Adv. Mr. Deepkaran Dalal, AOR Mr. Milind Kumar, AOR Mr. Nachiketa Joshi, A.A.G. Mr. Sarad Kumar Singhania, AOR Mr. Padmesh Mishra, Adv. Mr. Yashraj Singh Bundela, AOR Mr. Pradeep Misra, AOR Mr. Manoj Kumar Mishra, Adv. Mr. Daleep Dhyani, Adv. Mr. Suraj Singh, Adv. Ms. Sansriti Pathak, A.A.G. Ms. Shagufa Khan, Adv. Mr. Aman Prasad, Adv. Ms. Nidhi Jaswal, AOR Mr. Nikhil Goel, Sr. Adv. Mr. Rohit Amit Sthalekar, AOR Mr. Grish Malviya, Adv. Mr. Purnendu Bajpai, Adv. Mr. Shashank Singh, Adv. Mrs. Garima Prashad, Sr. Adv. Mr. Nishit Agrawal, AOR Ms. Kanishka Mittal, Adv. Ms. Deepti Rathi, Adv. Ms. Nidhi Singh, Adv. Ms. Upasna Agrawal, Adv. Mr. Shrey Kapoor, Adv. Mr. Abhay Singh, AOR Ms. Ankita Agarwal, Adv. Mr. N K Mody, Sr. Adv. Mr. Shishir Kumar Saxena, Adv. Mr. R N Pareek, Adv. Mr. Ankur Parihar, Adv. Mr. Anupam Raina, AOR Mr. Nikhil Goel, Sr. Adv. Mr. Rohit Amit Sthalekar, AOR Mr. Grish Malviya, Adv. Mr. Purnendu Bajpai, Adv. Mr. Shashank Singh, Adv. Mr. Prithvi Pal, AOR Mr. Sanjay Kumar Yadav, Adv. Mr. Bhupinder Yadav, Adv.