Motor Vehicle : Private operators cannot ply on notified intra-State routes unless expressly permitted

Supreme Court Upholds Priority of State Transport Undertakings on Notified Routes. Private operators denied permits on overlapping inter-state routes without express scheme approval

In a significant ruling, the Supreme Court of India has reaffirmed the supremacy of State Transport Undertakings (STUs) over private operators on notified routes, as per the Motor Vehicles Act, 1988. The judgment, delivered by a bench comprising Justices Dipankar Datta and Augustine George Masih, arose from multiple civil appeals and a writ petition challenging the refusal to grant or countersign permits for private operators on inter-state routes overlapping notified intra-state routes.

The core issue involved whether private operators could be granted permits on inter-state routes under an inter-state reciprocal transport (IS-RT) agreement when these routes overlap with intra-state routes that are part of an approved scheme under Chapter VI of the Motor Vehicles Act, 1988. The court decisively held that Chapter VI provisions have an overriding effect over Chapter V, thereby upholding the precedence of approved schemes over inter-state agreements.

The appeals were filed by the U.P. State Road Transport Corporation (UPSRTC) against orders of the Madhya Pradesh High Court, which had directed the State of Uttar Pradesh to countersign permits issued by the State Transport Authority of Madhya Pradesh. The High Court had acted on a public interest litigation and writ petitions filed by private operators, who argued that the Madhya Pradesh State Transport Corporation (MPSRTC) had ceased operations, and routes should be opened to private operators.

The Supreme Court set aside the High Court's orders, emphasizing that an inter-state agreement, being an agreement between states, does not constitute law and cannot override the statutory framework of the Motor Vehicles Act. The court underscored that private operators could not ply on notified routes unless explicitly permitted by an approved scheme.

The judgment also recognized the procedural and public interest considerations involved in the preparation and modification of transport schemes. It directed the transport authorities of Uttar Pradesh and Madhya Pradesh to engage in discussions to possibly modify the current IS-RT agreement, taking into account the cessation of operations by MPSRTC and the need to serve public interest without inconvenience.

The ruling has significant implications for the regulation of transport services across states, reinforcing the statutory framework's role in balancing state control and private participation in the transport sector.

Bottom Line:

The provisions of Chapter VI of the Motor Vehicles Act, 1988 override Chapter V and other laws, including inter-State reciprocal transport agreements. Private operators cannot ply stage carriages on notified intra-State routes or portions thereof unless expressly permitted under an approved scheme.

Statutory provision(s): Motor Vehicles Act, 1988 Sections 88, 98, 99, 100

U.P. State Road Transport Corporation v. Kashmiri Lal Batra, (SC) : Law Finder Doc id # 2804250