IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No._4555___________2009 (@ S.L.P. (C) NO. 29966 of 2008)

U.P. State Road Transport Corp. …Appellant

Vs.

Mohd. Ghilman Sharif & Others … Respondents

WITH CIVIL APPEAL Nos._4556-4557______ OF 2009

(@ S.L.P.(C)Nos.520 of 2009 and 783 of 2009)

J U D G M E N T  

ALTAMAS KABIR,J.

1. Leave granted.

2. This  appeal  has  been  filed  against  the  

judgment and order dated 14.11.2008 passed by  

the Allahabad High Court in Civil Misc. W.P.  

1

No.47949 of 2008 filed by the Respondent Nos.  

1 and 2 herein, inter alia, for the issuance  

of  a  Writ  in  the  nature  Mandamus  upon  the  

Transport Department of the State of U.P. and  

its  authorities  to  allow  the  writ  

petitioners/Respondent Nos.1 and 2 herein, to  

ply their vehicles against subsisting permits  

on  the  route  between  Muzaffarnagar-Rohana-

Deoband-Nagal-Saharanpur  and  allied  routes.  

By the said order, the High Court disposed of  

the  writ  petition  with  a  direction  to  the  

State  Transport  Authority  to  decide  as  to  

whether the permit of the Respondent No.1 was  

subsisting and if the same was found to be  

subsisting  the  respondents  would  not  be  

prevented from plying their vehicles on the  

route  in  question.   The  matter  was  to  be  

decided by a speaking order.

2

3. The  facts  in  brief  indicate  that  the  

Respondent No.1 Mohd. Gilman Sharif and Mohd.  

Ruman  Sharif,  claimed  to  be  joint  permit  

holders in respect of the aforesaid route. The  

second petitioner, Vinod Kumar, claims to have  

had  a  permit  in  respect  of  the  said  route  

which  had  expired  and  his  application  for  

renewal of the same is said to be pending.  

4. On 13.2.1986 a Scheme was proposed to notify  

38  routes  under  Section  68-C  of  the  Motor  

Vehicles Act, 1939(hereinafter referred to as  

‘the 1939 Act’), which would have the effect  

of  totally  excluding  all  private  operators  

from  the  said  routes.  While  Clause  (h)  of  

Section  68-C  provides  for  cancellation  of  

permits granted to private operators upon such  

Notification, Clause (j) provides for grant of  

compensation if no alternative route could be  

given  to  the  permit  holders.  Various  

3

objections  were  filed  by  the  existing  

operators to the said proposal and in the mean  

time on 1.7.1989 the Motor Vehicles Act, 1988  

(hereinafter referred to as ‘the 1988 Act’)  

came  into  force  and  the  proposed  Scheme  

continued  for  consideration  under  the  

provisions  of  the  1988  Act.  The  objections  

were considered by the Hearing Authority which  

held that the Scheme had lapsed under Section  

100(4)  of  the  1988  Act.  The  order  of  the  

Hearing Authority was confirmed by the High  

Court on 16.3.1990. The said view of the High  

Court was reversed by this Court in Ramkrishna  

Verma vs. State of U.P. [(1992) 2 SCC 620]  

upon  the  finding  that  the  Scheme  had  not  

lapsed and that the same was required to be  

finalized.  

5. On  29.5.1993  a  Notification  was  published  

under  Section  100(3)  of  the  1988  Act  

4

finalizing the Scheme of nationalization with  

exclusive right of operation to the appellant  

Corporation  and  total  exclusion  of  private  

operators.  The  said  Notification  was  again  

challenged  in  several  writ  petitions  which  

were  dismissed  by  the  High  Court  on  

19.11.1999.  The  various  Special  Leave  

Petitions  which  were  filed  against  such  

dismissal order were allowed by this Court on  

1.5.2001 and the matter was remanded to the  

Hearing Authority to consider the objections  

which had been filed by the private operators  

and which were under consideration when the  

impugned Notification dated 29.5.1993 had been  

issued.  The  Hearing  Authority  by  its  order  

dated  2.11.2001  allowed  the  existing  

operators, such as the Respondent Nos. 1 and  

2, to ply on the routes in question along with  

the Corporation.  

5

6. The  order  was  again  questioned  by  the  

Corporation by filing Writ Petition No.9332 of  

2002  in  the  High  Court  and  the  same  was  

dismissed  on  23.7.2002  with  the  High  Court  

holding that the Scheme had lapsed. The said  

order of the High Court was also challenged  

before this Court by the appellant Corporation  

as  well  as  the  private  operators.  Such  

challenge  was  upheld  on  29.11.2004  and  the  

matters were remanded to the High Court for  

re-hearing of Writ Petition No.9332 of 2002  

filed by the appellant Corporation.

7. While Writ Petition No. 9332 of 2002 was still  

to be heard, the applications for renewal of  

the permits of the private operators came up  

for consideration before the State Transport  

Authority which by its order dated 9.6.2005  

declined to renew the permits on account of  

the pendency of the said Writ Petition before  

6

the  High  Court.   Against  such  refusal,  

revision petitions were filed before the State  

Transport  Appellate  Tribunal  which  directed  

the permits to be renewed subject to the fate  

of Writ Petition 9332 of 2002. Consequently,  

on 20.1.2006 the permits were renewed subject  

to the said condition.

8. On 1.6.2007 the High Court allowed the Writ  

Petition and set aside the orders passed by  

the  Hearing  Authority  holding  that  permit  

holders who were granted permits prior to 1986  

were entitled to get compensation  according  

to the provisions of the Motor Vehicles Act,  

1988.   The  Special  Leave  Petitions  filed  

against the said order were dismissed by this  

Court on 16.7.2007.

9. While the Special Leave Petition against the  

order  of  the  High  Court  dated  1.6.2007  

allowing  Writ  Petition  No.9332  of  2002  was  

7

pending hearing, the State Transport Authority  

on 26.6.2007 prevented the private operators  

from  operating  on  the  routes  in  question.  

After the Special Leave Petition was dismissed  

on 16.7.2007 the Government took a decision on  

9.8.2007 to allow private operators to operate  

on  the  routes  in  question  along  with  the  

appellant Corporation.  On 28.3.2008 the State  

Government  issued  a  final  Notification  

allowing private operators to operate on the  

notified  route  in  question  along  with  the  

appellant-Corporation.  The said Notification  

dated  28.3.2008  was  challenged  by  the  U.P.  

Roadways Karamchari Union in W.P. No.398 of  

2008 and the Lucknow Bench of the Allahabad  

High  Court  by  its  order  dated  7.5.2008,  

restrained the authority from issuing permits  

on  the  notified  routes.  The  private  

respondents also filed W.P. No.47949 of 2008  

in the High Court for a direction upon the  

8

respondent Authority to allow them to ply on  

the routes in question on the strength of the  

permits held by them as no action had been  

taken either under the Scheme or in terms of  

Section  103  of  the  1988  Act  or  even  under  

Sections 104 and 105 thereof. The said Writ  

Petition No.47949 of 2008 was allowed by the  

High  Court  on  14.11.2008  and  the  State  

Transport Authority was directed to consider  

the applications filed by the respondents in  

the light of the Notification dated 28.3.2008  

by which private operators had been permitted  

to operate on the routes in question along  

with the appellant-Corporation.

10. It is against the said order of remand that  

the present appeal has been filed by the U.P.  

State Road Transport Corporation.

11. Mr.  Dushyant  Dave,  learned  senior  counsel  

appearing for the appellant-Corporation, while  

9

narrating the above-mentioned facts confined  

his submissions to the issue regarding renewal  

of the permits upon the orders of the State  

Transport Appellate Tribunal, subject to the  

decision in Writ Petition No.9332 of 2002. The  

said Writ Petition was, in fact, disposed of  

by the Allahabad High Court on 1.6.2007 in  

favour  of  the  appellant  Corporation  upon  

negating the stand that the Corporation was  

not in a position to cater to the needs of the  

travelling public on account of suffering huge  

losses and insufficient number of buses which  

disabled  them  from  providing  sufficient,  

adequate, economical and properly coordinated  

transport  service to  the travelling  public.  

Mr. Dave pointed out that the order of the  

Hearing Authority in so far as it modified the  

approved Scheme dated 29.5.1993, could not be  

sustained,  and  was  set  aside  by  the  High  

Court.  Mr. Dave also pointed out that while  

10

disposing of the said writ petition the High  

Court  had  categorically  held  that  permit  

holders  who  had  been  granted  permit  before  

13.2.1986 i.e., before the date of publication  

of the Scheme, whose permits were going to be  

affected by the approved Scheme on 29.5.1993,  

were only entitled to compensation in terms of  

the provisions of the Act.

12. Mr. Dave submitted that after such decision  

there was no scope for the private operators,  

including the Respondent Nos.1 and 2 herein,  

to be given any further opportunity of hearing  

regarding their claim to operate on the route  

in  question  on  the  basis  of  their  permits  

which had been cancelled.

13. Mr.  Ranjit  Kumar,  learned  senior  counsel  

appearing  for  Respondent  Nos.  1  and  2,  

submitted that all that the said respondents  

wanted  was  an  opportunity  to  place  their  

11

respective  cases before  the State  Transport  

Authority  in  order  to  establish  their  

eligibility  on  the  strength  of  the  permits  

issued  to  them  earlier  to  operate  on  the  

routes  in  question.  Mr.  Ranjit  Kumar  urged  

that the permits issued to the respondents did  

not stand cancelled as per the procedure under  

Section 103(2) of the 1988 Act, but merely  

became inoperative.  

14. He also urged that after a survey conducted in  

June 2007, the State Transport Authority had  

arrived at a conclusion that the appellant-

Corporation was not in a position to provide  

appropriate  service  on  the  notified  routes  

which caused the State Government to issue a  

Notification on 12.12.2007 proposing to modify  

the exclusive Scheme in terms of section 102  

of the 1988 Act. It was urged that even on a  

notified route, when a notified operator was  

12

unable to provide adequate service, the State  

Transport Authority and the State Government  

were vested with powers under Section 102 of  

the 1988 Act to modify the Scheme. Mr. Ranjit  

Kumar  referred  to  the  Constitution  Bench  

decision  of  this  Court  in  A.P.  State  Road  

Transport Corporation vs. Regional Transport  

Authority  and  another  [(2005)  4  SCC  391]  

wherein, while considering a similar question  

it  was  held  that  it  was  for  the  State  

Government to consider what is suitable for  

public service. The State Government has the  

power to modify the Scheme in case of a need  

since the Scheme is after all intended for the  

benefit  of  the  public  and  if  any  step  was  

required to be taken in that regard the State  

Government could always do so by modifying the  

Scheme.

13

15.  We are afraid, we are unable to agree with  

Mr. Ranjit Kumar on the question of further  

hearing to be given to Respondent Nos. 1 and 2  

on their claim to be allowed to operate on the  

notified routes in question on the basis of  

the  permits  which  according  to  the  said  

respondents were dormant and were capable of  

being reviewed in the existing circumstances.  

16. As we have indicated earlier, the permits of  

the private operators on the said routes were  

renewed  by  the  State  Transport  Appellate  

Authority by its order dated 20.1.2006 which  

made it very clear that such renewal would be  

subject to the fate of W.P. No.9332 of 2002.  

The  said  writ  petition  was  disposed  of  on  

1.6.2007 by the Allahabad High Court and the  

said judgment has been reported in 2001 Vol. 5  

ALJ at page 255.  After considering the entire  

matter in detail, the Division Bench of the  

14

High  Court  has  allowed  the  said  writ  

application filed by the appellant-Corporation  

and has negated the contentions of the private  

operators who, it was held, were only entitled  

to compensation in terms of the provisions of  

the 1988 Act.  

17. In that view of the matter, the present appeal  

has to be allowed. The directions given by the  

High Court in Civil Misc. Writ Petition No.  

47949 of 2008 are hereby set aside and the  

prayer made by Respondent Nos. 1 and 2 herein  

for being given a hearing to establish their  

claims  is  also  refused.   This  will  not,  

however,  prevent  the  said  respondents  from  

claiming compensation under Section 105 of the  

Motor Vehicles Act, 1988.  

18. The appeal is accordingly allowed in the above  

terms.

15

19. There will, however, be no order as to costs.

CIVIL APPEAL NOs.  ________ OF 2009  (@ S.L.P.(C)Nos.520 of 2009 and 783 of 2009)

20. In  view  of  the  aforesaid,  leave  is  also  

granted in these two special leave petitions, which  

are also allowed and disposed of accordingly.  

______________J. (ALTAMAS KABIR)

______________J. (CYRIAC JOSEPH)

New Delhi Dated: 20.07.2009

16