ivil Appeal No 921 of 1968
Appeal by special leave from the judgment and order dated January 8 1968 of the Kerala High Court in Writ Appeal No 79 of 1967
465 SV Gupte and AS Nambiar for the appellant
Sarjoo Prasad and MRK Pillai for respondent No 1
CM Kuruvilla Sardar Bahadur Vishnu Bhadur Saharya Yougindra Khushalani for respondent No 2
The judgment of the Court was delivered by Bachawat J
The appellant challenges the scheme nationalisation of road transport services in respect of 9 routes in the districts of Ernakulam and Kottayam
Chapter IVA the deals with nationalisation of road transport services
Section 68C provides for the preparation and publication of a draft scheme of nationalization of road transport services in general or any particular class of such service in relation to any area or route or portion thereof whether to the exclusion complete or partial of other persons or otherwise
Section 68D provides for the filing of objections of persons affected by the scheme for the consideration of the objections by the government for modification or approval of the scheme by the government and for publication of the approved or modified scheme
Section 68E provides that a scheme finally settled under sec
68D may at any time be cancelled or modified by the State transport undertaking
The procedure laid down in secs
68C and 68D shaH so far as it can be made applicable be followed in every case where the scheme is proposed to be modified as
if the modification proposed were a separate scheme
For the purpose of giving effect to the approved scheme in respect of a notified area or a notified route sec
68F2 iii authorises the Regional Transport Authority to modify the terms of an existing permit so as to curtail the area or route covered by the permit in so far as such permit relates to the notified area or notified route
Section 68 authorises the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV A and in particular to provide the form in which any scheme or approved scheme may be published under secs
68C and 68D
In exercise of its powers under sec
68 I the State Government framed the Kerala Motor Vehicles State Transport Undertaking Rules 1960
Rule 3 provides that every proposed scheme shall be in form I when it is in complete exclusion of existing road transport service in form when the scheme is in partial exclusion of existing road transport service in form III when the scheme is in supplementation of existing road transport service and in form IV when the scheme is to modify an existing scheme
On December 15 1965 the Kerala State Transport Corporation published a draft scheme in form II for nationalization of 9 specified routes in the districts of Ernakulam and Kottayam in partial exclusion of the existing passenger transport services 466 concerned giving the particulars of the stage carriage permits to be excluded
On October 17 1966 after hearing the objectors the State Government approved the scheme
On October 24 1966 the government published the approved scheme
On December 7 1966 the appellant filed a writ petition in the Kerala High Court to quash the scheme
VP Gopalan Nambiyar J dismissed the petition
A Divisional Bench of the High Court affirmed his order
The present appeal has been filed after obtaining special leave
The appellant s contention is that the impugned scheme is a complete exclusion scheme and should have been in form I and as it is in form Ii it is in contravention of Rule 3 read with sec
68C and is therefore invalid
Let us examine this contention
The scheme is in respect of 9 specified routes
The scheme excludes all private operators holding stage carriage
permits for those routes
Take the route Kottayam Ernakulam
All the private operators holding stage carriage permits for that route are excluded
It is therefore argued that the scheme is one of complete exclusion
But it appears that there are 33 existing routes partially overlapping the notified routes
The 33 existing routes and the notified routes have many common road sectors
The scheme does not interfere with the services on the 33 routes
In spite of the scheme the public can get services on the common road sectors from the operators running on the 33 routes
Take the notified Kottayam Ernakulam route
There is an existing Kottayam Muttupetty route
A portion of the Kottayam Muttupetty route overlaps the Kottayam Ernakulam route
The impugned scheme does not exclude the services of the operators of the Kottayam Muttupetty route on the road sector common to the Kottayam Ernakulam and Kottayam Muttupetty routes
On these facts it is impossible to
say that the impugned scheme is one of complete exclusion
Section 68C envisages schemes of road transport services in relation to any area or route or portion thereof whether to the exclusion complete or partial of other persons or otherwise
Rule 3 of the Kerala Motor Vehicles State Transport Undertaking Rules 1960 speaks of schemes of road transport service in complete or partial exclusion of existing road transport services
From the language of sec
68C and Rule 3 it appears that a complete exclusion scheme in relation to
any area or route would be a scheme which completely excludes the existing road services of private operators on the area or route in question
The route includes the highway over which it runs
If other existing services are allowed to continue over a part of the highway relating to the notified route the scheme
is not one of complete exclusion
467 A stage carriage permit is granted under secs
46 to 48 for a specified area
The words roads included in the proposed route or area in sec
47 1 f implies that a route includes the road or the physical track
Section 68F2iii implies that a portion of the route of an existing permit may relate to a notified route
This happens when the two routes have a common road sector Section 68F 2iii authorises the exclusion of the common portion of the road from the existing permit for giving effect to
the scheme for the notified route
For the purposes of Chapters
IV and IVA there is no practical distinction between the route or the notional line from one terminus to another for which the permit is granted and the road over which the transport services are run and operated
As pointed out in Nilkanth Prasad  Ors
vs State of Bihar1 the distinction between route as the notional line and road as the physical track disappears in the working of Chap
 The route is also an area
see Kondala Rao vs Andhra Pradesh STC Corporation2  CPC Motor Service vs State of Mysore3
The impugned scheme does not exclude the road transport services of the 33 existing routes over many sections of the highways relating to the notified routes
It follows that the scheme is not in complete exclusion of existing road transport services in respect of the notified routes and is not required to be in form I
There is no infirmity in the scheme because it was in form II
The impugned scheme is in partial exclusion of operators from Kottayam Ernakulam and Kottayam Eratupettah routes and 7 other routes
It is common case that there were earlier schemes relating to the Kottayam Ernakulam and Kottayam Eratupettah routes
In so far as the impugned schemes excludes private operators from those routes it has the effect of modifying the earlier schemes
The appellant s contention is that the impugned scheme is invalid as the modification of the earlier schemes were made without complying with the provisions of sec
68E In our opinion this contention is baseless
The new scheme has been proposed and approved after following the procedure laid down in secs
68C and 68D
In so far as the new scheme modities the earlier schemes the modifications could be made under sec
68E As the procedure laid down in sees
68C and 68D were followed the conditions of sec
68E were satisfied
68E does not require that the new scheme should expressly say that it cancels or modifies the earlier schemes
On the promulgation of the new scheme the earlier schemes stand modified by implication pro tanto
A scheme to modify an existing scheme simpliciter is required by Rule 3 of the Kerala Motor Vehicles State Transport Under 1 1962 Suppl
1 SCR 728 at 737
2 AIR 1961 SC 82 at 93
3 1962 Supp
ISCR 717 AIR 1966 SC 1661
468 taking Rules 1960 to be in Form IV
The impugned scheme was in Form H as it was in partial exclusion of the existing road transport service
Such a scheme could not be in form IV
The partial exclusion scheme was rightly proposed in form Ii and when approved it had the effect of modifying the earlier schemes
Counsel suggested that the approval of the scheme by the State Government on October 17 1966 was defective as the Government was merely of the opinion that the proposed scheme was necessary to provide efficient adequate and co ordinated road transport services and it did not form the opinion that the scheme was necessary to provide economical road transport service
The point was not taken in the courts below and we therefore indicated in the course
of the arguments that the appellant will not be permitted to raise
this point at this late stage
Several other objections were taken in the courts below but they are not pressed in this Court
The appeal is dismissed with costs
YP Appeal dismissed


Summary:
The respondent State approved a scheme in form II for nationalization of certain specific routes after complying with the provisions of sections 68C and 68D of the 
The scheme excluded
all private operator s from the notified routes
The notified routes formed part of highways having common road sectors and private operators continued to operate on the highways
The appellant unsuccessfully filed writ petition in the High Court to quash the scheme
In appeal to this Court the appellant challenged the validity of the scheme on the grounds that i the scheme was a complete exclusion scheme and should have been in form I and as it was in form II it was in contravention of Rule 3 of the Kerala Motor VehiclesState Transport Undertaking Rules 1960 read with section 68C of the Act and ii since there were earlier schemes they could not be modified by the impugned scheme without complying with the provisions of section 68E
Dismissing the appeal this Court HELD i From the language of section 68C and r 3 it appears that a complete exclusion scheme in relation to
any area of route would be a scheme which completely excludes the existing road services of private operators on the area or route in question
The route includes the highway over it runs
If other existing services are allowed to continue over a part of the highway relating to the notified route the scheme is not one of complete exclusion
The impugned scheme did not exclude the road transport services of other existing routes which overlapped many sectors of the highways relating to the notified routes
In spite of the scheme the public could get services on the common road sectors from the private operators who continued to operate the highways
Therefore the scheme was not in complete exclusion of existing road transport services in respect of notified routes and was not required to be in form 1
466 G H 467 D Nilkanth Prasad  Ors
vs State of Bihar
1962 Suppl
1 SCR 728 at 737 Kondala Rao vs Andhra Pradesh STC Corporation AIR 1961 SC 82 followed
ii On the promulgation of the new scheme the earlier schemes stood modified pro tanto
As the procedure laid down in sections 68C and 68D were followed the conditions of section 68 were satisfied
section 68E does not require that the new scheme should expressly say that it cancels or modities the earlier schemes
467 G