REPORTABLE   

IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION

CIVIL APPEAL NO. 5951 OF 2002

WITH

CIVIL APPEAL NO.  4894 OF 2010 (Arising out of SLP(C) No. 820 of 2003)

WITH

CIVIL APPEAL NO. 4895 OF 2010 (Arising out of SLP(C) No. 21707 of 2002)

Rasid Javed & Ors. etc.etc.          …Appellants

Versus   State of U.P.  & Anr. etc. etc. …Respondents     

JUDGEMENT

R.M. Lodha, J.

Delay  condoned  and  leave  granted  in  SLP(C)  

No.820 of  2003.   Leave also granted in  SLP (C) No.  21707  

of  2002.   The  applicants  in  the  I.As.  for  impleadment  are  

allowed to intervene.

Introduction

2. Five writ petitions by various operators came to be  

filed before High Court of Judicature at Allahabad questioning  

the Notification dated April 15, 2000 issued by the State of U.P.  

rescinding the earlier Notification dated April 16, 1999 and for  

consequential  reliefs.  The  Division  Bench  of  Allahabad  High  

Court heard   these writ petitions together and by a common  

judgment dated April 23, 2002 dismissed all the writ petitions. It  

is  from  this  common  judgment  that  these  three  appeals  by  

special leave arise.

Facts

3. The brief facts in relation to these appeals may be  

set out first.

A.  Appeal  by Rasid Javed and others

4. The appellants in this appeal claim that they have  

been  operators on Saharanpur-Karnal route (inter-State route)  

via Jandhera –  Rampur – Gangoh – New Yamuna Bridge.  In  

the  Notification  published  on  April  16,  1999  under  Section  

102(1)  of  the Motor  Vehicles Act,  1988 (for  short,  `the 1988  

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Act’),  the State Government proposed to modify the scheme  

notified  on  May  29,  1993  by  providing  that  permit  holders  

bearing Nos. 168/94, 169/94. 170/94, 171/94, 172/94, 173/94,  

222/94, 233/94, 23/95, 24/95, 25/95, 739/89, 242/94, 764/90,  

787/90, 772/90, 800/90 and 784/90 shall be allowed to operate  

their buses along with  the Uttar Pradesh State Road Transport  

Corporation  (UPSRTC)  on  Saharanpur-Karnal  route  (via  

Jandhera-Rampur-Gangoh-New Yamuna Bridge) provided that  

they get their permits counter-signed by State of Haryana for  

plying  their  buses  in  that  State.   By  the  said  Notification,  

objections  were  invited  from  the  UPSRTC  and  the  persons  

likely  to  be  affected  by  the  proposed  modification  and  Shri  

Zamirruddin,  Special  Secretary  and  Additional  Legal  

Remembrancer,  Uttar  Pradesh  was  appointed  Hearing  

Authority  to  hear  and  decide  the  objections  that  may  be  

received.  Pursuant  to  the  said  Notification,  objections  were  

received and the Hearing Authority after  hearing the affected  

parties held in  its Order dated October 11, 1999  that proposed  

modification  be approved, i.e. private operators be allowed to  

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ply their vehicles. According to the appellants, they are covered  

by the permits mentioned at Sl. No. 1 [column 4 - (c)(iii)] of the  

Schedule to the Notification dated April 16, 1999.   

B.   Appeal by Masood Ahmad and others

5. The  appellants  in  this  appeal  claim  to  be  permit  

holders  in  respect  of  Saharanpur-Loni  route  via  Shamli-

Baghpat-Marginal  Bandh  Road  –  ISBT  Delhi.   According  to  

them, they are covered by  Sl. No.1 [column 4 - (c)(i)] of the  

Schedule to the Notification dated April 16, 1999.  By the said  

Notification,  the  approved  scheme dated  May 29,  1993  was  

sought  to  be  modified  and  it  was  proposed  to  allow  these  

operators  to  operate their  buses along with the UPSRTC on  

Saharanpur-Loni  via  Shamli-Baraut-Baghpat-Marginal  Bandh  

Road – ISBT Delhi route.  

C.   Appeal by Raghunandan Goyal and Others

6. The appellants  claim to  have  been granted  inter-

State  permits  by  the  State  Transport  Authority  (STA),  Uttar  

Pradesh for an inter-State route known as Meerut-Chandigarh  

via  Baraut-Shamli-Gangoh-Saharanpur-Sarsawa-Yamuna  

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Nagar-Ambala.   Their  case  is  that  in  the  draft  modification  

published in the Notification dated April 16, 1999, their permits  

are mentioned  at Sl. No. 1 [column 4 - (c)(ii)] of the Schedule  

thereof.   By  the  said  modification,  it  was  proposed  to  allow  

these operators to operate their buses along with the UPSRTC  

on  Meerut-Chandigarh via Baraut-Shamli-Gangoh-Saharanpur-

Sarsawa-Yamuna Nagar-Ambala route provided that the permit  

holders  get  their  permits  counter-signed  by  the  State  

Government of Haryana for plying their buses in that State.  

Saharanpur-Delhi  route  (the  1959  Scheme)  and  previous  litigation  

7. On  February  26,  1959,  a  draft  scheme  was  

published under Section 68-C of the Motor Vehicles Act, 1939  

(‘the 1939 Act’ for short) in respect of the inter-State route viz;  

Saharanpur – Delhi proposing to authorize the State Transport  

Undertaking (STU) of Uttar Pradesh to operate stage carriages  

on the said route to the exclusion of all other operators.  

8. On  September  29,  1959  the  State  Government  

approved the said draft  scheme and published it  under  sub-

section (3) of Section 68-D of 1939 Act (hereinafter referred to  

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as `the 1959 Scheme’).   The 1959 Scheme provided 50 (25  

each  way)  State  Road  Transport  Services  or  more  as  may  

appear  necessary  from time to  time on that  route or  portion  

thereof from November 1, 1959 or thereafter.  It was provided in  

the approved scheme that the persons other than the  STU will  

not be permitted in plying any road transport service on the said  

route or portion thereof except as mentioned therein.

9. A group of  writ petitions, one by 32 operators and  

the other by 18 operators was filed before the High Court of  

Allahabad  questioning  the  validity  of  the  1959 Scheme.  The  

High Court vide its judgment dated October 30, 1961 directed  

the State Government not to enforce the 1959 Scheme against  

32 operators who had filed the first batch of writ petitions and it  

was directed that  the State Government  should hold a fresh  

enquiry  into  the  question  whether  the  scheme  should  be  

approved  or  not.  Similar  judgment  was  passed  in  the  other  

batch of writ petitions relating to 18 operators on February 7,  

1962.  

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10. The aforesaid judgments of  Allahabad High Court  

were  affirmed by this  Court  in  Jeewan Nath  Wahal  v.  State  

Transport  Appellate Tribunal  (C.A. No.1616 of 1968) decided  

on 03.04.1968.  In  Jeewan Nath Wahal, it  was held that the  

1959  Scheme   was  operative  and  not  affected  and  its  

enforcement  was  prohibited  against  50  operators  only  who  

approached the High Court.  It was further held that the STU  

has the exclusive right to ply its vehicles on the notified route  

(Saharanpur – Delhi route).   

11. Two writ petitions, one by Shri Chand1 and the other  

by  Citizen Council for Public Service were directly filed before  

this Court under Article 32 of the Constitution in the year 1985  

challenging  the  validity  of  proceedings  which  were  pending  

before  the  State  Government  pursuant  to  a  draft  scheme  

published on February 26, 1959.  This Court allowed these writ  

petitions on August 23, 1985 by the following order :

“…………In the instant case the delay is in the order of  26 years. In view of the above decisions we allow these  writ  petitions  and  quash  the  impugned  scheme  published on February  26,  1959 and the proceedings  which have taken place till  now pursuant thereto and  

1 Shri Chand v. Govt. of U.P., Lucknow  & Ors.    Citizen Council for Public Service v. Govt. of U.P. & Anr. [(1985) 4 SCC169]

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direct  the  State  Government  not  to  proceed with  the  hearing  of  the  matter.  It  is  now  open  to  the  State  Transport  Undertaking  of  Uttar  Pradesh  to  publish  a  fresh draft scheme under Section 68-C of the Act if it is  of opinion that it is necessary to do so. We, however,  permit the State Transport Undertaking to run the stage  carriage vehicles which it is now running on the route in  question under permits issued pursuant to the scheme  which is now quashed, till February 28, 1986 or till they  are replaced by temporary permits to be issued under  sub-section (1-A) of  Section 68-F of the Act  after  the  publication of a fresh draft scheme or by permits issued  under Chapter IV of the Act, whichever is earlier.”

12. Pursuant to the  aforesaid decision in Shri Chand’s  

case1, the UPSRTC published a draft scheme on February 13,  

1986 for 39 routes; Saharanpur – Delhi (Saharanpur-Nanauta-

Thanabhawan-Shamlikandhla – Baraut – Baghpat – Loni-Delhi)  

being the 1st Item in the draft scheme.   

The 1988 Act and matters before this Court in respect of   Saharanpur-Delhi route

13. While the said draft scheme was pending, the 1939  

Act was repealed and  the 1988 Act came into force with effect  

from July 1, 1989.

14. It appears that immediately after the 1988 Act came  

into force, two things happened viz; (one) some operators were  

granted  permits  for  Saharanpur  to  Ghaziabad  via  Shahdara  

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routes  and  (two)  the  Hearing  Authority  held  that  the  draft  

scheme published on February 13, 1986 by the UPSRTC under  

the 1939 Act had lapsed by operation of Section 100 (4) of the  

1988  Act.  Ram  Krishna  Verma  and  few  others  filed  writ  

petitions in the High Court of Allahabad challenging the grant of  

permits for Saharanpur to Ghaziabad via Shahdara route while  

the UPSRTC challenged the order of the Hearing Authority by a  

separate writ petition.  The writ petition filed by the UPSRTC  

was dismissed by Allahabad High Court  on March 16,  1990.  

The writ petitions filed by Ram Krishna Verma and others  were  

also dismissed by the Allahabad High Court on July 23, 1990.  

Special  leave  petitions  were  filed  against  the  aforesaid  

judgments before this Court in which leave was granted.  These  

appeals (Ram Krishna Verma and Ors. v. State of U.P. & Ors.2)  

were allowed vide judgment dated March 31, 1992. This Court  

held that the nationalization of Saharanpur – Delhi route by the  

1959  Scheme   is  operative  to  the  total  exclusion  of  every  

operator except UPSRTC and 50 operators whose objections  

were upheld by the High Court.   In the operative order,  this  2 (1992) 2 SCC 620

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Court  quashed  the  permits  granted  to  the  private  operators  

under  Section  80  of  the  1988  Act  on  the  respective  routes,  

parts  or  portions  of  the  nationalized  routes  or  February  13,  

1986 draft scheme.   

15.   After  decision  of  this  Court  in  Ram  Krishna  

Verma2,  the  competent  authority  approved  the  Scheme  and  

directed  the  same  to  be  published.   On  May 29,  1993,  the  

approved  scheme  (  for  short,  `the  1993  Scheme’)  was  

published in the Gazette.  At Serial No. 1 of the 1993 Scheme  

is Saharanpur-Delhi route.   

16. The controversy with regard to the extent and effect  

of  the draft  scheme dated February 13, 1986 and the  1993  

Scheme  vis-à-vis the 1959  Scheme relating to Saharanpur-

Delhi  notified  route  reached  this  Court  on  more  than  one  

occasion.   We have noticed some of these decisions in earlier  

part  of  the judgment and shall  consider this aspect  further  a  

little later. Suffice it to state here that the 1993 Scheme came  

to  be  published  pursuant  to  decision  of  this  Court  in  Ram  

Krishna  Verma2.

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Present controversy

17. By a Notification published on  April 16, 1999, the  

State Government, in exercise of the powers under sub-section  

(1)  of  Section  102  of  the  1988  Act  proposed  to  make  

modification in the 1993 Scheme  to the extent mentioned in  

column 4  of  the  Schedule  appended  thereto.   In  respect  of  

Saharanpur-Delhi route modification proposed was as follows :

“Sl. Notification Name of the Modification proposed No. No. and date notified route

By which the in which the  Routes were modification Notified. Is proposed.

1.     2.      3.       4. 1. No. 1635/30.2.93  Saharanpur-Delhi & 38 In the said scheme after

565’85 dated         Delhi & 38  Clauses (b) of the May 29, 1993        other routes   following clause shall be

 inserted, namely :

(c)  Notwithstanding        anything contained in       clauses (a) and (b) the       private bus operator;

(i)  holding permit numbers      P.S.T.P./MPMV 1/89,      2/89, 3/89, 4/89, 5/89,      6/89, 7/89, 8/89, 9/89,      10/89, 11/89, 12/89,      13/89, 14/89, 16/89,      17/89, 18/89, 19/89,       Shall be allowed to       operate their buses       alongwith U.P.S.R.T.C.

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     on the route namely,       Saharanpur-Loni Via-       Shamali-Baraut-Baghpat        -Marginal Bandh Road-        ISBT Delhi.

(ii)  holding permit numbers       P.S.R.T.P. 303/89,       P.S.T.P. 304/89 and       P.S.T.P. 305/89, shall       be allowed to operate       their buses alongwith        U.P.S.R.T.C. on the  

Route namely Meerut- Chandigarh via Baraut- Shamli-Gangoh- Saharanpur  –  Sarsawa- Yamuna – Ambala; and

(iii)  holding permit numbers        168/94, 169/94, 170/94,        171/94, 172/94, 173/94,         222/94, 233/94, 23/95,        24/95, 25/95, 739/89,        242/94, 764/90, 787/90,        772/90, 800/90, 784/90,        shall be allowed to         operate their buses         alongwith U.P.S.R.T.C.         on the route namely :-         Saharanpur-Karnal via         Jandhera-Rampur-         Gangoh – Nea Yamuna         Bridge :

       Provided that the permit Holders sub-clauses (ii) and  (iii)  above  shall  get  their   permits  counter-signed  by the  State  Government  of Haryana  for  plying  their   buses  in  the  State  of Haryana.        ”

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18. The   Notification  provided  that  the  UPSRTC and  

any  other  person  likely  to  be  affected  by  the  proposed  

modification may make representations within 30 days from the  

date of publication of the Notification in the Gazette and that the  

representations  so  received  will  be  heard  by  the  Hearing  

Authority  Shri  Zamiruddin,  Special  Secretary  and  Additional  

Legal Rememberancer, Uttar Pradesh.

19. In pursuance thereof various representations were  

received.  The Hearing  Authority  after  hearing  the  concerned  

parties  who  made  the  representations  passed  an  order  on  

October 11, 1999 approving the notified proposed modification  

and  the  objections  presented  by  the  UPSRTC  and  other  

objectors were dismissed.

20. The State Government, however, by a Notification  

dated April 15, 2000 in exercise of the powers under Section  

102 of 1988 Act read with Section 21 of General Clauses Act,  

1897 rescinded the Notification dated April 16, 1999.   

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Main submissions of the parties

21. Mr. Dinesh Dwivedi, learned senior counsel led the  

arguments on behalf of the appellants. He argued that it was  

not open to the State Government to withdraw the Notification  

dated April 16, 1999 after it had been approved by the Hearing  

Authority by his order dated October 11, 1999.  According to  

him, the order passed by the Hearing Authority on October 11,  

1999  is  the  order  of  the  State  Government  under  Section  

102(1) and (2) of the 1988 Act.    It is so because in the  draft  

Notification  dated  April  16,  1999,  Shri  Zamirudeen,  Special  

Secretary and Additional Legal Remembrancer was appointed  

as the Authority to hear the objections and  he was acting as  

the State Government  under the U.P. Rules of allocation of  

business.   In  this  regard,  learned  senior  counsel   placed  

reliance  on three decisions of this Court, viz., Samsher Singh  

v.  State  of  Punjab  and  another3;  Capital  Multi-purpose  Co-

operative  Society  Bhopal  and  others   v.  State  of  M.P.  and  

others4 and A.  Sanjeevi  Naidu,  Etc.  v. State  of  Madras and  

3 (1974) 2 SCC 831 4 (1967) 3 SCR 329  

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another5.   Mr.  Dinesh Dwivedi also submitted that  decision  

under Section 102(1) of the 1988 Act has to be by the same  

Authority  who  heard  the  objections  and  there  could  not  be  

divided responsibility of a quasi judicial act.  He sought support  

from a decision of this Court in Gullapalli Nageswara Rao and  

others  v.  Andhra Pradesh State Road Transport  Corporation  

and another6).  He further argued that  once the decision has  

been  taken  by  the  Competent  Authority  then  the  State  

Government cannot modify that decision because it is a quasi  

judicial  decision.   He  placed  reliance  on  M/s.  Nehru  Motor  

Transport  Co-operative  Society  Ltd.  &  Ors. v.  State  of  

Rajasthan  &  Others7.   In  the  alternative,  learned  Senior  

Counsel submitted that even otherwise the material on record  

demonstrated that the order of modification dated October 11,  

1999  was  approved  by  the  Principal  Secretary  of  the  

Department.

22. Mr. Dinesh Dwivedi,  learned senior counsel would  

also contend that  approval order passed under Section 102(1)  

5 (1970) 1 SCC 443 6 AIR 1959 SC 308 7 AIR 1963 SC 1098

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and  (2)   was  not  required  to  be  published  in  the  Official  

Gazette.  He invited our attention to  Section 68-E of 1939 Act  

and  Sections  100(3)  and  102  of  1988  Act  to  indicate  the  

difference  in  the  two  provisions.   He  further  submitted  that  

Section  21  of  the  General  Clauses  Act,  1897   is  not  at  all  

attracted as the power that  was sought  to  be exercised has  

been expressly provided in Section 102 of the 1988 Act.

23. While dealing with the effect of the draft  proposal  

dated  April  16,  1999  and  whether  the  1993  Scheme  

superseded the 1959 Scheme,  Mr. Dinesh Dwivedi submitted  

that  there could not  be operation of  two notified schemes in  

respect  of  Saharanpur-Delhi  route  and  consequently  the  

judgment of this Court in Ram  Krishna  Verma2 has to be read  

in the light of the provisions of law and not in contravention of  

the provisions of law.  Learned senior counsel submitted that  

the 1959 Scheme has been superseded  by the 1993 Scheme  

and that is what the State Government also understood.   He  

also assailed the judgment of the High Court and submitted that  

writ petitions have been dismissed on the grounds contrary to  

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law.   Learned  senior  counsel   submitted  that  the  appellants  

have been granted permits validly in the year 1989 which have  

been renewed in the year 1994 and the High Court overlooked  

the fact that revocation of permits by virtue of the decision of  

this Court in  Ram Krishna Verma2   implied only revocation to  

the  extent  of  only  overlapping  portion  of  Delhi-Saharanpur  

route.   He, thus, submitted that appellants’ permits are valid as  

far as non-notified portion is concerned.   

24. Mr.  Nagendra  Rai,  learned  senior  counsel  

appearing for the appellants in Civil Appeal No. 5951 of 2002  

adopted the arguments of Mr. Dinesh Dwivedi and submitted  

that  the  1959  Scheme stood  modified  by  the  1993  Scheme  

published on May 29, 1993  and that for the same route, there  

could not be two approved  schemes.  He submitted that the  

approval order dated October 11, 1999 by the Hearing Authority  

is not passed by virtue of any delegation of power nor any right  

of appeal is available against the said order and as such the  

order  dated  October  11,  1999  is  a  final  order  of  the  State  

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Government in terms of Section 102 of 1988 Act and required  

no publication in the Official Gazette.   

25. Mr. P.N. Gupta, learned counsel while adopting the  

arguments  of  Mr.  Dinesh  Dwivedi  and  Mr.  Nagendra  Rai  

contended that once the final order of approval was passed on  

October 11, 1999, the proposal for modification as provided in  

Notification dated April 16, 1999 could not have been cancelled  

or  rescinded  as  the  draft  Notification  dated  April  16,  1999  

merged in the final order dated October 11, 1999. According to  

him,  the  proposal  for  modification  of  the  approved  scheme  

under Section 102 of the 1988 Act and its approval by the State  

Government  are  not  legislative  in  nature  and  consequently  

Section  21  of  the  General  Clauses  Act,  1897   has  no  

application.  Learned counsel  would submit  that  even if  it  be  

assumed that the impugned Notification amounts to modify the  

approved scheme and Section 21 of the General Clauses Act  

has application, in that event the impugned Notification dated  

April  15,  2000 is  vitiated because it  has to be issued in  the  

same manner as provided under Section 102 of 1988 Act which  

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was not done.  He also contended that once the modification  

was  approved  as  per  order  dated  October  11,  1999,  the  

valuable  rights  accrued  in  favour  of  the  appellants  and  that  

could not be taken away except after giving an opportunity of  

hearing  and  on  this  ground  also  the  impugned  Notification  

dated April 15, 2000 is bad in law.

26. Mr. Ratnakar Dash, learned senior counsel for the  

State of U.P. and Ms. Garima Prashad, learned counsel for the  

UPSRTC supported the impugned judgment.  The thrust of their  

submission is that both approved schemes, namely, the 1959  

Scheme and the 1993 Scheme are effective and in operation to  

make  the  Saharanpur-Delhi  route  fully  nationalized  for  the  

exclusive operation by the STU and no private operator  can  

operate  on  this  route  and,  therefore,  notified  route  viz;  

(Saharanpur-Delhi route) could not have been modified without  

modifying the 1959 Scheme.   Learned senior counsel for the  

State as well as counsel for the UPSRTC  contended that the  

order of the Hearing Authority after hearing objections of the  

affected  parties  is  a  quasi-judicial  order  and  is  not  the  final  

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order of the State Government.   They contended that it was  

open  to  the  State  Government  to  modify  the  order  of  the  

Hearing Authority  before publication of  the modified scheme.  

Reliance in this connection was placed upon a decision of this  

Court in Afsar Jahan Begum (Smt) And Others v. State Of M.P.  

And Others8.  Learned counsel for the UPSRTC also contended  

that the appellants did not have permits on the route in question  

either in 1959 or 1986 or even in 1993  and that the permits  

given to the private operators under the draft scheme of 1986  

as  well  as  under  the  1993  scheme  have  been  quashed  by  

Allahabad High Court and that appellants have no permits at  

all.   She  submitted  that  a  total  of  124  permits  have  been  

granted to UPSRTC on Saharanpur-Delhi route which are valid  

till the scheme remains in force and that the UPSRTC has been  

plying exclusively on the Saharanpur-Delhi route and there is  

no operation by the private operators.  Learned counsel for the  

UPSRTC placed reliance upon the decisions of  this Court  in  

Mysore  State  Road  Transport  Corporation  v.  Mysore  State  

8 (1996) 8 SCC 38

2

Transport Appellate Tribunal9; C.P.C. Motor Service, Mysore v.  

State  of  Mysore and Another10;  Adarsh  Travels  Bus  Service  

and Another v. State of U.P. and Others11 and Karnataka State  

Road Transport  Corporation v.  Ashrafulla  Khan And Others12  

and submitted  that no private bus can be allowed to overlap  

fully or partially on nationalized route if there is no mention of  

that in the scheme of nationalization of the said route itself.

The issue

27. In light of the contentions outlined above, the core  

question that falls for consideration is : whether the Notification  

dated April 15, 2000 is invalid and vitiated by  any legal flaw?

28. Insofar as the factual aspect is concerned, it does  

not  seem  to  be  in  dispute  that  the  permits  granted  to  the  

appellants  related  to  routes  which  overlapped  the  Delhi-

Saharanpur notified route.  

Our appraisal  9 (1974) 2 SCC 750 10 AIR 1966 SC 1661 11 (1985) 4 SCC 557 12 (2002) 2 SCC 560

2

(A) The effect of publication of a scheme under Section  68D  

29. The expression  “route” is defined in Section 2(28-

A) of 1939 Act as follows :

“S.  2  (28-A)  “route”  means  a  line  of  travel  which  specifies  the  highway  which  may  be  traversed  by  a  motor vehicle between one terminus and another;”

30. Chapter  IV-A  of  the  1939  Act  makes  special  

provisions  relating  to  the  STUs.   Particularly   Section  68-C  

provides  for  preparation  and  publication  of  scheme  of  road  

transport  service  by  an  STU.    The  objections  to  the  draft  

scheme  published  under  Section  68-C  may  be  filed  under  

Section 68-D.  Sub-section (2) of Section 68-D provides that the  

State Government after considering the objections and hearing  

the objectors and the STU may approve or modify the scheme.  

Sub-section (3) of Section 68-D  provides that the scheme as  

approved or modified under sub-section (2) shall be published  

in the Official Gazette by the State Government and the same  

shall  then become final  and called `approved scheme’.  Once  

the  scheme  has  been  published  under  sub-section  (3)  of  

2

Section  68-D,  Section  68-FF  imposes  restriction  on  grant  of  

permits in respect of notified area or notified route. From these  

provisions,  it  is  apparent   that  once  a  scheme  is  published  

under Section 68-D in relation to any area or route or portion  

thereof, whether to the exclusion, complete or partial of other  

persons  or  otherwise,  no  person  other  than  the  STU  may  

operate on the notified area or notified route except as provided  

in the scheme itself. In Adarsh Travels Bus Service11, this Court  

held that a necessary consequence to these provisions is that  

no  private  operator  can  operate  his  vehicle  on  any  part  or  

portion of a notified area or notified route unless authorized so  

to do by the terms of the scheme itself.

31. A definite legal position has been crystalised by this  

Court in  Mysore State Road Transport Corporation9  that any  

route or  area either wholly or  partly  can be taken over by a  

State Undertaking under any scheme published, approved and  

notified under the provisions of Chapter IV-A of 1939 Act and  

that  if  the  scheme  prohibits  private  transport  operators  to  

operate on the notified area or route or any portion thereof, the  

2

Regional  Transport  Authority  (RTA)  cannot  either  renew the  

permit  of  such  private  operators  or  give  any fresh  permit  in  

respect of a route which overlaps the notified route.

32. That  the  scheme  framed  under  Section  68-C  of  

1939 Act is a `law’ is  settled by a Constitution Bench decision  

of this Court in the case of H.C. Narayanappa and Ors. v. State  

of Mysore and Others13. This position has been reiterated by  

this Court in  Ram Krishna Verma2.   H.C. Narayanappa13 also  

holds that the scheme framed under Section 68-C of 1939 Act  

excludes the private operators from notified routes or areas.

(B) The status of appellants’ permits

33. Insofar as Saharanpur-Delhi route is concerned, it  

became  a  notified  route  under  the  1959  Scheme.   The  

controversy regarding the 1959 Scheme  reached this  Court  

initially  in  Jeewan  Nath  Wahal  case  wherein  a  three-Judge  

Bench of this Court upholding the order  of the High Court   held  

in unambiguous terms that Saharanpur-Delhi route approved in  

the 1959 Scheme  stood nationalized to the complete exclusion  

13 (1960) 3 SCR 742

2

of private operators except 50 operators against whom it was  

held not be operative till their objections are heard and decided  

by the Hearing Authority.   The decision of  this Court  in  Shri   

Chand1  has been explained in subsequent decision in the case  

of  Ram  Krishna  Verma2    by  holding  that  nationalization  of  

Saharanpur-Delhi route in the 1959 Scheme  cannot be said to  

have been quashed  in Shri Chand1 except to the extent of 50  

operators  and  in  any  case  the  decision  of  a  Bench  of  two-

Judges in Shri Chand1  cannot have the effect of overruling the  

decision of a Bench of three-Judges in  Jeewan Nath Wahal.  

This Court further held in  Ram Krishna Verma2 that  the fresh  

draft  scheme  published  on  February  13,  1986  must  be  

construed to be in relation to 50 existing operators only. The  

same position was reiterated by this Court in Nisar Ahmad and  

Ors. v. State of U.P. and Ors.14  and  Gajraj Singh and Ors. v.  

State of U.P. & Ors.15.  In Gajraj Singh15,  it was clearly stated  

that insofar as Saharanpur-Delhi route is concerned, it shall be  

deemed to have been approved and maintained in terms of this  

14 1994 Suppl. (3) SCC 460 15 (2001) 5 SCC 762

2

Court’s  decision  in  Ram  Krishna  Verma2.  In  light  of  these  

decisions of this Court,  there is no scope of any doubt  that  

Saharanpur-Delhi  route  on  its  nationalization  stood  frozen  

under the 1959 Scheme against everyone except 50 operators.  

The  draft  scheme  published  on  February  13,  1986  was  

confined to those 50 operators alone and not to other private  

operators.    By  the  1993  Scheme,  Saharanpur-Delhi  route  

stood frozen  against 50 operators as well.   The effect of  these  

two schemes  (1959 Scheme and 1993 Scheme),  thus,  has  

been   that  the  entire  Saharanpur-Delhi  route  became  fully  

nationalized  for  the  exclusive  operation  by  the  STU   i.e.,  

UPSRTC and no private  operator  could  operate  on the said  

route.  As a matter of fact,  consequent upon decision of this  

Court in the case of Ram Krishna Verma2 and the settled legal  

position that RTA cannot either renew the permit of such private  

operators or give any fresh permit in respect of a route which  

overlaps  the  notified  route,  the  appellants’  permits  stood  

cancelled  and  in  any  case  these  permits  lost  their  legal  

significance  and  sanctity.    In  this  backdrop,   the  whole  

2

exercise  undertaken  by  the  State  Government   under  sub-

section (1) of Section 102 of 1988 Act proposing to modify the  

1993 Scheme relating to Saharanpur – Delhi notified route was  

misconceived as the permits specified in that  Notification did  

not  exist  in  law.   The  finding  of  the  High  Court  in  the  

circumstances  that  the  modification  proposal  dated  April  16,  

1999  proceeded  on  the  misconception  that  petitioners  

(appellants  herein)  were  holding  permits  on  the  concerned  

route  cannot  be  said  to  be  unjustified.   Moreover,  in  the  

absence  of  any  proposal  to  modify  the  1959  Scheme,  the  

modification  proposed  in  the  1993  Scheme  vide  Notification  

dated April 16, 1999  was meaningless.   The contention that  

the 1959 Scheme merged in the 1993 Scheme has no merit.  It  

is true that 1959 Scheme was approved under 1939 Act and  

even  after  repeal  of  1939  Act  by  1988  Act,  the  State  

Government  was  competent   to  prepare  fresh  scheme  by  

following the procedure contemplated in Sections 99 and 100  

or modify that scheme under Section 102 of the 1988 Act but the  

proposed modification published in the Notification  on April 16, 1999  

2

does  not  seek  to  modify  the 1959 scheme at  all.    Since the  

Notification dated April 16, 1999 is,  ex facie, misconceived and  

meaningless  as  regards  Saharanpur-Delhi  route,   the  

proceedings taken pursuant  thereto  by the Hearing Authority  

and his decision dated October 11, 1999  also have no legal  

effect.  

(C) Section  102  of  the  1988  Act  and  the  extent  of  authority to the Hearing Authority

34. Chapter  VI  of  the  1988  Act  contains   special  

provisions relating to  the STUs.  Section 99 thereof  makes a  

provision  for  preparation  and  publication  of  proposal  by  the  

State Government regarding road transport service  of an STU.  

As per  sub-section (1) of Section 100, on the publication of  

such proposal,  the objections may be filed  before the State  

Government  within  30  days  therefrom.    Sub-section  (2)  of  

Section 100 provides that the State Government may approve  

or  modify  such  proposal  after  hearing  the  objectors  and the  

representatives  of  the  STU.  Sub-section  (3)  of  Section  100  

makes a provision that the scheme relating to the proposal as  

2

approved or modified under sub-section (2) shall be published  

in the Official Gazette in at least one newspaper in the regional  

language  circulating  in  the  area  or  route  covered  by  such  

scheme.  On  publication  of  the  said  scheme  in  the  Official  

Gazette,  it  becomes  final.   Section  102  of  the  1988  Act  

empowers  the  State  Government  to  modify  the  approved  

scheme in the public interest. Since the controversy relates to  

this Section, it is appropriate that we reproduce Section 102 of  

the 1988 Act as it is.  The said Section reads thus:

“S.102.  Cancellation  or  modification  of  scheme.-  (1) The State Government may, at any  time,  if  it  considers  necessary,  in  the  public  interest  so to do, modify any approved scheme  after giving –

(i) the State transport undertaking; and  

(ii) any other person who, in the opinion  of the State Government, is likely to  be  affected  by  the  proposed  modification,

an opportunity  of  being heard in  respect  of  the  proposed modification.  

(2) The  State  Government  shall  publish  any  modification  proposed  under  sub-section  (1)  in  the Official Gazette and in one of the newspapers  

2

in the regional languages circulating in the area in  which  it  is  proposed  to  be  covered  by  such  modification,  together  with  the  date,  not  being  less than thirty days from such publication in the  Official Gazette, and the time and place at which  any representation received in this behalf will be  heard by the State Government.”  

35. A  close  look  at  Section  102  would  make  it  

manifestly clear that modification of the approved scheme may  

be done by the State Government in the public interest after  

giving  opportunity  of  being  heard  in  respect  of  proposed  

modification to the STU and the persons likely to be affected by  

the  proposed  modification.  The  modification  proposed  is  

required to be published in the Official Gazette and in one of  

the  newspapers  in  the  regional  languages  circulating  in  the  

concerned  area  under  Section  102(2).   On  behalf  of  the  

appellants, it was contended that in the proposed modification  

published in the Official Gazette on April 16, 1999, the authority  

to  hear  the  objections/representations  was  given  to Shri  

Zamirruddin,  Special  Secretary  and  Additional  Legal  

Remembrancer and the said Hearing Authority after hearing the  

objections of the affected persons and the UPSRTC approved  

3

the proposed modification and rejected the objections received  

in this regard and the approval by the Hearing Authority of the  

proposed modification by his order dated October 11, 1999 is  

the  approval  of  the  State  Government.   Is  the  order  dated  

October  11,  1999  of  the  Hearing  Authority   approving  the  

proposed modification published in the Official  Gazette dated  

April 16, 1999,  an order of the State Government modifying the  

approved scheme of  1993 under Section 102(1)  of  the 1988  

Act?  The answer has to be in the negative  because  Shri  

Zamirruddin  was  given  authority  to  hear  the  representations  

received by the State Government to the proposed modification  

but  no authority was given to  him  to  approve the proposed  

modification or modify the approved scheme. The Notification  

dated April 16, 1999 does not empower the Hearing Authority to  

approve or modify the scheme; he  has only been empowered  

to hear the objections.   That a person who hears must decide  

and that divided responsibility is destructive of the concept of  

judicial hearing is too fundamental a proposition to be doubted.  

This settled principle  has also been highlighted by this Court in  

3

Gullapalli  Nageswara  Rao6 but  based  on  such  principle  the  

limited authority of hearing given to the Hearing Authority by the  

State Government cannot be treated as enlarged in its scope.  

A delegatee must confine his activity within four corners of the  

powers invested in him and if  he has acted beyond that,  his  

action  cannot  have  any legal  sanction  unless  ratified  by  the  

delegator.   

36.  A distinction must be maintained where the hearing  

authority  is  empowered  by  the  State  Government  to  hear  

objections and approve the proposed modification or modify the  

approved scheme and a case where the hearing authority is  

authorized to hear the objections/representations relating to the  

proposed modification to the approved scheme.  In the  latter  

case, the authority delegated to the Hearing Authority is limited  

and he is not authorized to approve the proposed modification  

or modify the approved scheme.  The present case falls in the  

latter  category  and  accordingly  the  order  of  the  Hearing  

Authority dated October 11, 1999 is in excess of the authority  

given  to  him  and  cannot  be  construed  as  a  final  order  of  

3

approval under Section 102 (1) of the 1988 Act.   Whether such  

limited authority of hearing to the Hearing Authority makes any  

legal  sense  is  an  aspect  for  consideration  by  the  State  

Government.  Suffice, however, to say that it was not open for  

the Hearing Authority to approve the proposed modification or  

modify the proposed scheme.    

(D) Invocation  of  Section  21  of  General  Clauses  Act  :  whether valid

37.  Having already held that the order of the Hearing  

Authority dated October 11, 1999 is in excess of the authority  

given to him and that the said order has no legal effect, we do  

not  find  that  there  was  any  impediment  for  the  State  

Government in exercising its power under Section 102 of the  

1988  Act  read  with  Section  21  of  the  General  Clauses  Act,  

1897 to rescind the Notification dated April 16, 1999.   

38. Section  21  of  the  General  Clauses  Act,  1897  

provides thus:

“S.21.  Power to issue, to include power  to  add  to,  amend,  vary  or  rescind,  notifications,  orders, rules or bye-laws.  

3

– Where, by any Central Act or Regulation,  a power to issue notifications, orders, rules,  or  bye-laws is  conferred,  then that  power  includes  a  power,  exercisable  in  the  like  manner  and  subject  to  the  like  sanction,  and  conditions  if  any,  to  add  to,  amend,  vary  or  rescind  any  notifications,  orders,  rules or bye-laws so issued.”

 39. The aforesaid provision came up for consideration  

before the Constitution Bench of  this Court  in  Kamla Prasad  

Khetan & Another v. Union of India16   way back in 1957.  The  

majority opinion stated:

“It  is  to  be  remembered  that  S.21  of  the  General  Clauses  Act  embodies  a  rule  of  construction,  and  that  rule  must  have  reference to the context and subject-matter  of the particular statute to which it is being  applied….”.

40. It seems to be fairly settled that under Section 21 of  

the General Clauses Act, an authority which has the power to  

issue  a  notification  has  the  undoubted  power  to  rescind  or  

modify the notification in the like manner.  In the instant case,  

there is no doubt that the Notification dated April 15, 2000 has  

been made in the same manner as the earlier Notification dated  

16 AIR 1957 SC 676

3

April 16, 1999.  Since the order of the Hearing Authority dated  

October  11,  1999 is  not  an order  of  approval  under  Section  

102(1)  of  the  1988  Act  and  cannot  be  treated  as  such,  the  

power of the State Government to rescind the Notification dated  

April 16, 1999 did not get exhausted.  The argument that the  

draft Notification dated April 16, 1999 merged in the order dated  

October 11, 1999 is fallacious and devoid of any substance.    

41. Mr. Dinesh Dwivedi,  learned senior counsel urged  

on behalf of the appellants  that even otherwise the material on  

record demonstrated that  the order  of  the modification dated  

October 11, 1999 was approved by the Principal Secretary of  

the Department and, thus, there was an approval by the State  

Government.   We are unable to accept this submission. In the  

first place, except the decision of the Hearing Authority dated  

October 11, 1999 there is nothing  on record to conclude that  

the State Government had approved the proposed modification  

as notified  on  April 16, 1999.  Secondly, even if we assume  

that  an executive action not expressed to be made in the name  

of the  Governor as contemplated under Article 166(1) of the  

3

Constitution may not vitiate such action as nullity and as held  

by this Court in Dattatraya Moreshwar Pangarkar v. The State  

of Bombay and Others17 the non-compliance with the provisions  

of either of clauses of Article 166 would lead to the result that  

order  in  question  would  lose  the  protection  which  it  would  

otherwise  enjoy  had  the  proper  mode  for  expression  and  

authentication been adopted,  but  then there has to be some  

formal order by the State Government under Section 102(1) of  

the 1988 Act.   Moreover,  there is nothing on record even to  

indicate that  the order dated October 11, 1999 of the Hearing  

Authority was  communicated to the appellants or any of the  

affected parties.  For all these reasons, the only conclusion that  

can be drawn is that the order dated October 11, 1999 is not an  

order as contemplated under Section 102 (1) of the 1988 Act by  

the State Government approving the modification proposed in  

the Notification dated April 16, 1999.

42. In view of our finding that the order of the Hearing  

Authority  dated  October  11,  1999  cannot  be  treated  as  an  

order  of  the  State  Government  under  Section  102(1)  of  the  17 (1952) 1 SCR 612

3

1988 Act,  it  is not necessary to consider the question as to  

whether  the  order  of  the  State  Government  under  Section  

102(1) of the 1988 Act is required to be published in the Official  

Gazette or not.     

43.  The contention of  Mr. P.N. Gupta, learned counsel  

for some of the appellants  that the opportunity of hearing was  

required  to  be  given  to  the  appellants  before  issuance  of  

Notification dated April 15, 2000 has no merit for more than one  

reason.  For one, this contention is founded on the premise that  

the order of the Hearing Authority dated October 11, 1999 is the  

order of the State Government.  Secondly, what  Section 21 of  

the  General  Clauses  Act  requires  is  that  the  authority  

empowered  to  issue  notification  must  exercise  its  power  to  

rescind such notification in the like manner.  We have already  

noticed in the preceding discussion that the Notification dated  

April  15,  2000  has  been  made  in  the  same manner  as  the  

earlier Notification dated April 16, 1999.

Conclusion

3

44. For  the  reasons  given  above,  we  hold  that  the  

Notification dated April  15,  2000 is valid and does not suffer  

from any  legal  flaw and,  accordingly,  dismiss  these  appeals  

with  no  order  as  to  costs.  Interlocutory  applications  for  

impleadment stand disposed of, as indicated above.

…..………………….J.   (R.V. Raveendran)

……..……………….J.       (R.M. Lodha)

New Delhi July 5, 2010

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