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 RoutesThe 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...

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

Yash Mittal

Inter-state agreeement is not "law" and cannot override the statutory scheme under the Motor Vehicles act.

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