G.T. VENKATASWAMY REDDY versus STATE TRANSPORT AUTHORITY & ORS.
[2016] 8 S.C.R. 1, Supreme Court of India, 2016
Outcome: Reference answered
Segment: Ratio
[2016] 8 S.C.R. 1 
G.T. VENKATASWAMY REDDY 
v. 
STATE TRANSPORT AUTHORITY & ORS. 
(Civil Appeal No. 4480of1998) 
JULY19,2016 
[T.S. THAKUR, CJI, 'FAKKIR MOHAMED IBRAHIM 
KALIFULLA, S.A. BOBDE, R. BANUMATHI AND 
UDAY UMESH LALIT, JJ.] 
Motor Vehicles Act, 1939: ss.48, 57(8), 63 - Whether on 
the publication of an approved scheme the number of trips of the 
vehicles of the existing operators can be increased by granting the 
variation of a permit even when the existing operators are allowed 
to carry on their business as on the date of the publication of the 
scheme -
Held: A close reading of the sub-section (8) of s.57 shows 
that an application for variation of any permit in the case of a 
stage carriage, for the purpose of increasing the number of trips as 
well as number of vehicles covered by the permit, mandatorily to be 
treated as an application for the grant of a new permit - s.57(8) is 
controlled by s. 68FF falling under Chapter IV-A, by virtue of the 
superseding effect of s.68B also falling under Chapter IVA - Once 
a scheme formulated under s. 68D gets approved, then all the permits 
in the route/area covered by the scheme get frozen by virtue of 
operation of s.68FF - The effect of s.68FF can be altered /modified/ 
cancelled only in the manner as provided for under s.68E and in 
no other manner - By virtue of that, either a grant of a ne11• permit 
or the variation of an existing permit of private operator cannot be 
ordered in respect of an area or route
covered by an Approved 
Scheme ..:. Increase in the number of trips or vehicles which were 
being run under the existing exempted permit under a Scheme will 
amount to grant of a new permit to operate one more Stage Carriage 
which is not permissible under s.68FF. 
s.57 - Application for variation of permit - Requirement for 
its grant - Held: A conspectus consideration of sub-sections (1) to 
(5) and (7) along with sub-section (8) of s.57 shows that an 
application for variation when treated as an application for the 
grant of a new permit, all the mandatory requirements which are to 
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[2016] 8 S.C.R. 
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be followed for the grant of a new permit have to be followed in 
letter and spirit even with reference to an application for increasing 
the trips as well as for increasing the number of vehicles. 
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Answering the reference, the Court 
HELD: 1.1 A close reading of the sub-section (8) of section 
57 shows that an application for variation of any permit in the 
case of a stage carriage, for the purpose of increasing the number 
of trips as well as number of vehicles covered by the permit, 
mandatorily to be treated as an application for the grant of a new 
permit. A close reading of sub-sections (1) to (7) demonstrate 
how such provisions mandates compliance of various specific 
requirements, which are intricately connected, with the grant of 
a new permit, which are to be 'mutatis mutandis' to be complied 
with even in respect of an application for variation, which is 
governed by sub-section (8). It is not as if such procedures 
prescribed in sub-sections (1) to (7) barring sub-section (6) are 
to be followed casually and that the same would ultimately result 
in grant of variation irrespective of compliance or non-compliance 
of such rigorous procedures. If the prescription of the time limit, 
specified in sub-section (2) is not complied with, it may result in 
instantaneous invalidation of the application at the very threshold. 
Similarly, if the Regional Transport Authority failed to follow the 
statutory
prescription in the matter of publication of such an 
application, by following the time limit and the other prescribed 
procedure under the Rules, then again, the consideration of the 
application itself may not take place until such prescriptions are 
meticulously followed and complied with. Then again, under sub-
section (4) anyone who wants to make a representation as against 
the grant of variation will have to strictly follow the time limit 
viz., filing of such representation before the appointed date as 
notified by the Regional Transport Authority and that while filing 
such representation, it must be ensured that simultaneously a 
copy was served on the applicant, failure to follow such 
prescription will automatically result in rejection of the right of 
hearing or right of consideration of any such representation with 
reference to the application for variation. [Paras 38, 39] [27-B-
D; 28-F-H; 29-A-B] 
2. The requirement of giving a public hearing coupled with
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
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AUTHORITY 
requirement of personal hearing to the applicant as well as the A 
person making the representation is yet another prescription 
which again shows that very serious consideration should be 
given to the application for variation in as much as it will have 
very serious impact on the operation of the vehicle in the route 
in question in the event of such variation being granted, anyone 
living in that area can voice his grievance or support before the 
Regional Transport Authority in such a public hearing. 
[Para 40)(29-C-D) 
R.Raghuram v. P. Jayarama Naidu and others 1990 
(Supp) SCC 361 - affirmed. 
Karnataka State Road Transport Corporation, 
Bangalore v. B.A.Jayaram and others 1984 (Supp) 
SCC 244 : 1984 SCR 768 - overruled. 
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3. Section 68-B of the Act which falls under Chapter IV-A 
states that all the provisions contained in Chapter IV-A shall have 
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supervening effects on any inconsistent provisions contained in 
Chapter IV or any other law for the time being in force or in any 
instrument having effect by virtue of any such law. Under Chapter 
IV Sections 42 to 68 of the Act have been listed. In so far as, 
Section 57(8) of the Act is concerned, there will be no 
inconsistency with any of the provisions contained in Chapter 
IV-A. The said Section 57 will apply in all force even in respect 
of the prescription contained in the provisions under Chapter 
IV-A viz., Section 68A to 681 of the Act. [Para
43][30-D-E) 
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4. The formulation of a scheme is to be prepared and 
published by a State Transport Undertaking in respect of the 
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services to be provided in any area or route to be covered. The 
underlying object for such formulation of a scheme for its 
preparation and publication, must be for providing an EFFICIENT, 
ADEQUATE, ECONOMICAL and PROPERLY coordinated road 
transport service with the paramount consideration of public 
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interest and such scheme should be prepared and published. 
Once such a scheme is formulated with the above avowed objects 
in mind and is notified, under Section 68D, every person who is 
already providing transport facility in that area or route or any 
association representing persons interested in the provision of 
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[2016)8 S.C.R. 
road transport facilities recognized by the State as well as the 
local authority or police authority who are also located in that 
area or route, will be entitled to raise their objections or their 
representations within 30 days from the date of publication to 
the State Government. Under sub-section (2) of Section 68D of 
the Act, the State Government after considering the objections 
and after giving an opportunity of hearing to the objector or his 
representative as well as the representatives of the State 
Transport Undertakings can either approve the scheme as 
proposed or give a modified scl eme. Under Section 68E of the 
Act, the scheme can be cancelled in the form in which it was 
approved or can be modified by following the very same procedure 
prescribed under sub-sections 68C and 68D of the Act. However, 
the State Transport Undertaking with the previous approval of 
the State Government can modify the scheme without following 
the procedure laid down in Section 68C and 68D of the Act under 
D the proviso to Section 68E. That apart under sub-section (2) of 
Section 68E of the Act, the State Government is fully empowered 
to modify any scheme published under sub-section (3) of Section 
68D of the Act after giving an opportunity of hearing to the State 
Transport Undertaking, as well as, to any other person who in 
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the opinion of the State Government is likely to be affected by 
the proposed modification. Once the
approved scheme comes 
into effect, under Section 68F of the Act, the State Transport 
Undertakings can be issued with the required permits. [Paras 
44, 45][30-F-H; 31-A-B, C-F] 
5. Section 68FF creates a restriction on grant of permits in 
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respect of notified area or notified route. A close reading of the 
said provision discloses that where an approved scheme as 
stipulated under Section 68D(3) of the Act in respect of an area 
or a route is published, then, it prohibits grant of any permit except 
in accordance with the provisions of this scheme. The substantive 
part of Section 68FF therefore makes it clear that once the 
G approved scheme comes into play, then, there will not be any 
scope for grant of any permit in that area or the route covered by 
the scheme, except what is specifically permitted or provided 
under that scheme itself. By way of an analogy, it can be stated 
that where, under the scheme while the State Transport 
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Undertaking alone is exclusively permitted to operate the service A 
in any particular area or route and even while providing for such 
exclusive operation by State Transport Undertaking, if the 
operation by any existing permit holder is saved either fully or 
partially that as rightly stated in 'RAGIIURAM' and 'EGAPPAN', 
such operation by other private operators gets frozen and while 
interpreting Section 57 (8) of the Act that application for variation 
will be nothing but an application for grant of a new llermit. 
Therefore, even in respect of protected operation under the 
scheme of any existing operator, as 011 the date of the approved 
scheme, he will have to restrict his 'operations to the extent to 
which he was permitted as on that date and the manner in which 
such operation was permitted and not beyond. Once things get 
frozen, the frozen stage can be changed only by way of a permitted 
process. Herc, when by virtue of Section 68FF of the Act, the 
permit stood frozen, as on the date the scheme was published, 
then, if the said frozen stage is to be altered or modified, the 
provision by which such modification or alteration can be effected 
can be only by applying Section 68E, which is the legally 
pc1·missible manner in which such frozen stage can be altered or 
modified. Any other manner in which the said frozen stage is 
sought to be altered or modified, that is totally prohibited under 
the
statutory provisions. Therefore, if under the scheme, if the 
permit gets frozen, within the prescriptions contained under the 
scheme and if a variation is to be considered for that permit either 
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by way of increase in the number of trips or addition of vehicle 
without any modification or alteration effected under Section 68E 
of the Act, it will be wholly prohibited under the provisions falling 
under Chapter IV-A and consequently, such variation applied for 
can never even be considered by any of the authorities. That will 
be the consequential effect of the application of Section 68FF of 
the Act and other relevant provisions falling under Chapter IV-
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A. Any other interpretation would run contrary to the prescription 
contained in Chapter IV-A of the Motor Vehicles Act. (Paras 46, G 
47)(31-G-H; 32-A-C, D-G] 
6. The legal propositions are: 
Chapter IV-A supersedes any inconsistent provisions in 
Chapter IV. The policy of the Legislature is clear from Section 
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A 68C that the State Transport Undertaking may initiate a scheme 
for the purpose of providing an efficient, adequate, economical 
and properly coordinated road transport service to be run and 
operated by the State Transport Undertaking in relation to any 
area or route or portion thereof. It may do so if it is necessary in 
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the public interest. Grant of variation under Section 57(8) will be 
as good as grant of a new permit. Section 57(8) is controlled by 
Section 68FF falling under Chapter IV-A, by virtue of the 
superseding effect of Section 68B also falling under Chapter IVA. 
Once a scheme formulated under Section 68D gets approved 
under 68D(3) of Chapter IVA, then all the permits in the 
route I area covered by the scheme will get frozen by virtue of 
operation of Section 68FF. The effect of Section 68FF can be 
altered I modified I cancelled only in the manner as provided for 
under Section 68E and in no other manner. By virtue of the above, 
either a grant of a new permit or the variation of an existing permit 
D of private operator cannot be ordered in respect of an area or 
route covered by an Approved Scheme. Increase in the number 
of trips or vehicles which were being run under the existing 
exempted permit under a Scheme will amount to grant of a new 
permit to operate one more Stage Carriage which is not 
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permissible under Section 68FF. The proposition oflaw, laid down 
by this Court in 'JAYARAM'
impliedly stood overruled in 
'ADARSH TRAVELS'. The economy and coordination, two of 
the factors, which govern the Approved Scheme, will be seriously 
infringed if the variation is to be granted of the existing permit 
condition. Even if there is an interstate agreement under Section 
63 of the Act for increasing the number of trips, such an 
agreement cannot override the provisions of Chapter IV-A by 
virtue of Section 68B of the Act. Section 63 being in Chapter IV 
of the Act, the Scheme approved under Chapter IV-A will prevail 
over it. The Approved Scheme will exclude the operation of other 
stage carriage services on the Route I Area covered by the 
G Scheme, except those whose names are mentioned in the Scheme 
and to the extent to which such exception is allowed. The 
provisions in Chapter IV-A are devised to override the provisions 
of Chapter IV and it is expressly so enacted, the provisions of 
Chapter IV-A are clear and complete regarding the manner and 
effect of the "takeover" of the operation of a road transport 
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G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
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service by the State Transport Undertaking in relation to any 
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Area or Route or portion thereof (ADARSH TRAVELS). A 
necessary consequence of those 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 term of 
the scheme itself. He· may not operate on any part or portion of 
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the notified Route or Area on the mere ground that the permit as 
originally granted to him covered the notified Route or Area 
(ADARSH TRAVELS). [Para 50)(33-E-II; 34-A-H; 35-A-C] 
Pa11diya11 Roadways Corporation Ltd. v. MA.Egappan 
1987 (2) SCC 47 : 1987 (2) SCR 391; Adarsh Ti·avels 
Bus Service and another v. State of UP. and others 
(1985) 4 sec 557- approved. 
Karnataka State Road Transport Corporation, 
Bangalore v.· Karnataka State Transport Authority, 
Bangalore and others 1987 (Supp) SCC 648- referred 
to. 
Case Law Reference 
1990 (Supp) sec 361 
affirmed 
Para 1 
1984 SCR 768 
overruled 
Para4 
1987 ( 2 ) SCR 391 
approved 
Para4 
(1985) 4 sec 557 
approved 
Para4 
1987 (Supp) sec 648 
referred to 
Para4 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4480 
of1998. 
From the Judgment and Order dated 23.02.1998 of the High Comt 
of Judicature at Madras in C.R.P. No. 553 of 1988 
WITH 
C. A. No. 4481of1998, C. A. Nos. 7195-7197 of2001, C. A. 
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Nos. 2782, 7299 of2002, C.A. Nos.3605, 3606, 3633, 3731-3733, 3853 
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of2003, SLP (C) Nos. 22621-22622 of2015. 
K. K. Venugopal, Ms. Kiran Suri, A. Mariarputham, Amit Singh 
Chaddha, Thomas P. Joseph, Raju Rammachandran, Sr. Advs., 
R. Venkataramani, AAG, N. D. B. Raju, M. E. Nagesh, Rohit Bhat, 
Guntur Prabhakar, S. J. Amith, Gautam Kumar, Dr. (Mrs.) Vipin Gupta, 
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[2016] 8 S.C.R. 
M. Palani, Ms: Aruna Mathur, Avneesh Arputham, Yusuf Khan, 
Ms. AnuradhaArputham, M/s. Arputham Aruna & Co., Balaji Srinivasan, 
Ms. Vaishnavi Subrahmanyam, Ms. Srishti Govil, Dilpreet Singh, Mayank 
Kshirsagar, Ms. Pratiksha Mishra, Arunava Mukherjee, M. Gireesh 
Kumar, Sriram P., Ankur S. Kukarni, Yijay Kumar, Jayanth Muth Raj, 
Ms. Malavika J., Sureshan P., Arunava Mukher, N. D. B. Raju, 
N. Ganpathy, M. E. Nagesh, B. Balaji, Muthuvel Palani, Vikram Aditya 
Narayan, Ms. M. Yijay Kumar T., Venkateshwar Rao Anumolu, Goli 
Rama Krishna, Shashwat Goel, J. N. Singh, G. Ramakrishna Prasad, 
R. Ayyam Perumal, A. V. Rangam, Ms. D. Bharathi Reddy, K. V. Mohan, 
R. S. Hegde, Ms. Farhat Jahan Rehmani, Shanti Prakash, Rajeev Singh, 
V. N. Raghupathy, Advs. for the appearing pa1ties. 
The Judgment of the Court was delivered by 
FAKKIR MOHAMED IBRAHIM KALIFULLA, J. I. This 
reference to this Constitution Bench was made by a Division Bench of 
D this Court in their order dated 22.07.2003 made in the case of 
R. Raghuram Vs. P. Jayarama Naidu and others reported in 1990 
(Supp) SCC 361, which reference though was initially made to a Three 
Judges Bench, was subsequently referred to the Constitution Bench by 
the Three Judges Bench led by the Honourable The Chief Justice of 
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India vi de order dated 01.12.2004. As the issues raised and argued 
before us were common, on the question referred, we heard arguments 
in common. 
2.
We heard the arguments of Mr. K.K. Venugopal, learned senior 
counsel for the appellant in the C.A.NoJ606/2003, Ms. Kiran Suri, 
learned senior counsel for the appellant in C.A.No.4480/1998, Mr. A. 
Mariarputham, learned senior counsel for the appellant in C.A.Nos. 7195-
7197 /200 I, Mr. Amit Singh Chaddha, learned senfor counsel for the 
appellant in C.AJ853/2003 and Mr. Raju Rammachandran, learned 
seniOr counsel for the respondent(s) in C.A.No.4480/I 998. 
3. Mr. K.K. Venugopal, learned senior counsel made his leading 
submissions, followed by Ms.Suri and Mr. Chaddha as well as Mr. 
Mariarputham, learned senior counsels for the appellants, while Mr. Raju 
Ramachandran, learned senior counsel addressed arguments on behalf 
of the respondents in these appeals.
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
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AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
4. Mr. K. K. Venugopal, learned senior counsel for the appellant 
A 
in C.A.3606 of 2003 made & brief reference to the order dated 
22.07.2003, by which the present reference came to be made to the 
Constitution Bench and the subsequent order dated 01.12.2004 as we! I. 
Learned senior counsel in his submissions, fairly pointed out that the 
issue concerned in this reference has to be considered by referring to 
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the decisions reported in Karnataka State Road Transport Corporatiou, 
Bangalore Vs. B.A.Jayaram tmd others - 1984 (Supp) SCC 244 
(hereinafter referred to as 'JAYARAM'), Pa11tliya11 Roadways 
Corporation Ltd. Vs. M.A.Egappan - 1987 (2) SCC 47 rbereinafter 
referred to as 'EGAPPAN'), Adarsh Travels Bus Service a11d another 
Vs. State of U.P. and others - (1985) 4 SCC 557 (hereinafter referred 
to as 'ADARSH TRAVELS'), Kttrtutlttktt State Ro(l(I Transport 
Corporation, Bangalore Vs. Karnataka Stttle Transport Authority, 
Bangalore and otlters -1987 (Supp) SCC 648 (hereinafter referred 
to as 'KSRTC') and R.Rag/111ram (supra) (hereinafter referred to as 
'RAGHURAM'). 
5. The learned senior counsel made a detailed reference to the 
list of dates commencing from 1963-64 when the initial permit in the 
case of appellant in C.A.3606 of2003 viz., permit No.13/63-64 for the 
Route Bangalore to Hosur via., Madivala, Chandapura, Anekal, Thali, 
Denkanikottah and Keelamangalam
came to be issued, which permit 
was originally granted in favour of one Mr. C. Rajasekaran and 
subsequently transferred to Smt. G. Kavitha Gopinath on 12.03.1998 
and even thereafter transferred in favour of the present appellant Smt. 
A.M. Kalaivani Ammal. The learned senior counsel also referred to the 
application made by the appellant on l 0.01.1985 to the State Transport 
Authority (STA), Bangalore for grant of four additional singles and one 
additional vehicle by the order dated I 0.01.1985, the Authority granted 
two additional singles with inclusion of one additional vehicle. Thereafter 
by referring to the subsequent proceedings initiated at the instance of 
the appellant, the learned senior counsel referred to the order of the 
STAT, Madras as well as that of the order ofthe learned Single Judge in 
C.R.P.No.553of1988 and the order of the Division Bench in W.A.No.750 
and 780 of2002 dated 23.03.2002 pursuant to which the present appeal 
came to be filed. 
6. The learned senior counsel referred to Section 48(3)(xxi), 
Section 57(8) and Section 63 of the Motor Vehicles Act, 1939 (hereinafter 
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[2016] 8 S.C.R. 
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referred to as "the Act"), which pertain to the statutory prescriptions 
concerning grant of variation as well as the requirement for the counter 
signature respectively. The learned senior counsel also fairly referred 
to the provisions viz., Sections 68A, 688, 68FF falling under Chapter IV-
A of the Act while making his submissions. 
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7. The learned senior counsel while formulating his submissions, 
contended that the reference itself was based on incorrect provisions 
because, there is no conflict or inconsistency between 'JAYARAM' and 
'EGAPPAN' since the existing permit in 'JAYARAM' was an exempted 
one on the Nationalized Route and variation of that permit by added 
singles and additional bus was an issue, while in 'EGAPPAN', the 
operator was not one of the persons exempted under the Nationalized 
scheme and on the other hand he was operating on a non-scheme route. 
The learned senior counsel then contended that 'ADARSH TRAVELS' 
does not deal with Section 57(8) of the Act which concerns grant of 
variations, but dealt with the interpretation of an existing scheme and as 
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to whether an operator on that Route could operate with corridor 
restrictions. The learned senior counsel submitted that the ratio in 
'ADARSH TRAVELS' being that the condition of the Scheme would 
cover the rights of the operator and therefore the said case is not 
applicable to the case on hand. As far as the case in 'RAGHURAM' is 
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concerned, learned senior counsel submitted that the said case was not 
of any consequence, because the review petitioner in that case wrongly 
proceeded on the basis as to what was included was an approved Scheme, 
while in fact it was only a draft scheme, which would attract different 
consequence. 
8. Lastly, he contended that the judgment in 'JAYARAM', 
'RAGIIURAM' and 'KSRTC' support the case of the appellant, which 
concerns grant of variation on a nationalized Route, that the appellant 
was operating from 1965 and the variation was granted in 1985 and, 
therefore, his operation should not bed isturbed in public interest. 
9. Ms. Suri, learned senior counsel for the appellant in 
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C.A.No.4480of1998, after referring to the list of dates rightlyfornmlated 
the questions as under 
l-1 
(i) Whether variation is permissible in a notified scheme route? 
and 
(ii) Whether the Tamil Nadu Act disentitles counter signature of
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
interstate permit variation? 
I 0. The learned senior counsel after making reference to 
'EGAPPAN' judgment, submitted that the appellant's permit was covered 
by a draft scheme. As regards the alleged conflict between 'JAYARAM' 
and 'EGAPPAN', the learned senior counsel submitted that since the 
scheme was at the draft stage, the position was different. As far as the 
implication ofSection 68FF of the Act was concerned, the learned senior 
counsel submitted that the same would bar any grant of permit which 
would include variation by way of additional singles or additional vehicles. 
11. Mr. Mariarputham, learned senior counsel for the appellant in 
C.A.Nos.7195-7197 of2001, submitted thatthe question as regards the 
implication by reason of the Tamil Nadu Act can be left open for 
consideration by the regular Bench since the question referred to the 
Constitution Bench does not cover the said issue. 
12. Mr. Chaddha, learned senior counsel for the appellant in 
C.A.No.3853 of2003 after making reference to the scheme concerning 
the case of the appellant in that case, submitted that the said scheme 
does not cover the case, in as much as the argument is that any interstate 
agreement even entered subsequently, will stand excluded and by 
referring to the object of the scheme in the case of the said appellant 
and after referring to the relevant laws in the agreement, learned senior
counsel sought to distinguish the case of the appellant. 
13. As against the above submissions, Mr. Raju Ramachandran, 
learned senior counsel forthe respondent in C.A.4480of1998 submitted 
that Section 68B of the Act is the complete answer to the argument of 
the learned counsel for the appellant in C.A.3853 of2003. The learned 
senior counsel further submitted that having regard to the implication of 
the provisions contained in Chapter IV-A of the Act, the scheme is the 
law and if the scheme does not permit any variation, then the same 
would not be permissible. 
14. Having heard learned senior counsel for the appellants and 
the learned senior counsel for the respondent, we proceed to answer the 
reference as under. 
15. By order dated 22.07.2003, the Division Bench of this Court 
after noting the reference made in the case of R.Raghuram (supra) to 
a Constitution Bench and on finding that later the matter was then referred 
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to a three Judge Bench, and subsequently before the three Judge Bench, 
the petition itself abated on account of the death of the petitioner in that 
case and since the conflict continued to remain in these cases, the matter 
was referred to a Bench of three Judges. Subsequently, when the above 
appeal along with the connected matters was listed before a three Judge 
Bench headed by the then Hon'ble The Chief Justice of India, by an 
order dated 01.12.2004, the said Bench again referred the case back for 
hearing before a Constitution Bench. That is how these appeals are 
listed before us. 
16. When we refer to the order dated 22.07.2003, we find an 
apparent conflict in the view of the law taken in 'JAYARAM' and 
'EGAPPAN'. It was also noted therein that the Constitution Bench 
decision in 'ADARSH TRAVELS', wherein, similar question came to 
be considered and decided was distinguished by a three Judge Bench of 
this Court in 'KSRTC'. The case which got abated was reported in 
'RAGHURAM'. When we read the order dated 22.07.2003, which is 
the order by which initially the reference came to be made to a three 
Judge Bench which was subsequently referred to the Constitution Bench 
by the subsequent order dated 01.12.2004, except making a reference 
to the apparent conflict as between 'JAYARAM' and 'EGAPPAN' as 
well as the distinction in 'ADARSJI TRAVELS' made in 'KSRTC', there 
was no specific terms of
reference made in either of the two orders. 
However, when we refer to the case which got abated viz., 
'RAGJIURAM', while dealing with an identical issue, this Com1 while 
referring the review to a Constitution Bench has specified the terms of 
reference which can be culled out and can be taken as the Terms of 
Reference and the same reads as under: 
.. Whether on the publication of an approved scheme, 
the number of trips of the vehicles of the existing 
operations can be increased both by number of trips 
and vehicles by granting the variation of a permit even 
when the existing operators are allowed to carry on 
their business as on the date of the publication of the 
scheme". 
A little later we will refer to the relevant provisions, which 
necessitated the said reference. 
17. It is wot1hy to note that before formulating the said question
G.T. VENKATASWAMY REDDYv. STATE TRANSPORT 
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AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
for reference to a Constitution Bench, the learned Judges cul led out the 
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ratio decidendi in the Constitution Bench decision of • ADARSH 
TRAVELS' and how the case in 'JAYARAM' run counter to the said 
ratio and consequently, it was held that the ruling in 'JAYARAM' was 
impliedly overruled in' ADARSH TRAVELS'. 
18. Keeping the said perception which weighed with this Court in 
'RAGHURAM' to make a reference to the Constitution Bench, we can 
discern from the said order of reference that the conflict with reference 
to which the present reference came to be made by the orders dated 
22.07 .2003 and 01.12.2004 were in all fours covered by the reference 
made in' RAGl/URAM' to the Constitution Bench. Therefore, though 
the said reference stood abated because of the demise of the appellant 
therein, the question of law referred to the Constitution Bench rightly 
surviyed and the said question requires to be answered in this reference. 
19. In order to answer the above referred question, we have to 
make note of the principles which were noted in the judgments reported 
in 'JAYARAM'(supra), 'ADARSHTRAVELS'(supra), 'EGAPPAN' 
(supra) - 'KSRTC' (supra) and 'RAGIIURAM' (supra), apart from 
the relevant provisions falling under Chapter IV and JV-A of the Act. 
We shall make a reference to the decisions in the forefront before making 
a reference to the Statutory provisions and
thereafter analyze the question 
for consideration and render our decision. 
20. Before doing so, at the very outset, we want to make it clear 
that we are not dealing with any individual facts involved in these appeals 
as we are not concerned with various intricated facts involved in the 
different appeals. After we answer the reference all the appeals will be 
listed before the regular Bench for disposal based on the answer to the 
question referred before us. With that prelude, we proceed to first analyze 
the decisions mentioned above. 
21. 'JAYARAM' (supra) is the stai1ing point for this controversy, 
in which the legal questions framed and the answer rendered can be set 
out. The question considered by the said two Judge Bench decision in 
'JAYARAM' has been formulated in paragraph 9 which reads as under: 
"9. On the above rival contentions, two main questions 
arise for our consideratio11, 11a111ely, 
(1) Whether sub-section (8) of section 57 creates a legal 
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fiction by reason of which the grant of an application 
for variation in the conditions of a permit in respect of 
a matter set out in that sub- section results in the grant 
of a new permit ? 
(2) Whether an increase in the number of trips or the 
number of vehicles above the maximum specified in an 
existing inter-State stage carriage permit would be 
inconsistent with the provisions of the said Scheme ? " 
22. Before answering the above questions the learned Judges 
made a detailed reference to the various provisions contained in Chapter 
IV and IV-A of the Act. Thereafter, by making a particular reference to 
Section 57(8) of the Act, the learned Judges in their analyses observed 
as under in paragraph 15 : 
"15 . ... .... If the effect of sub-section (8) of section 
57 were as contended for by the Appellant, that is, if 
the said sub section (8) were to create a legal fiction by 
which an application for variation of the conditions of 
a permit of the nature referred to in that subsection is 
to be deemed to be an application for the grant of a 
new permit and such variation when granted would 
result in the grant of a new permit, then clearly by reason 
of the prohibition contained in section 68-FF, the 
granting of such application would be inconsistent with 
the provisions of the said Scheme and would not be 
permissible in lmv. Considerable emphasis 11•ere placed 
on behalf of the Appellant on the
words '"shall be treated 
as an application for the grant of a new permit" 
occurring in the said sub-section (8) and on the basis 
of this phraseology, it was submitted that an application 
for variation of a condition of a permit referred to in 
subsection (8) of section 57 was by a fiction of law put 
on the same footing as an application for the grant of a 
new permit and it, therefore, followed as a corol!aly 
that such an application if granted would result in the 
grant qf a new permit. " 
23. Thereafter, the learned Judges referred to sub-section I to 10 
,of Section 57 of the Act in detail and then stated as under in paragraph 16:
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
"' 16. . ........ . Sub-section (8) comes immediately after 
sub- sections (3) to (7) and when read in the context of 
these sub-sections and in juxtaposition with them, it is 
clear that the legislative intent in enacting that 
subsection was to prescribe the procedure to be followed 
when an application for variation of the conditions of 
a permit referred to in that sub-section is made, this 
procedure being the same as is laid down in sub sections 
(3) to (7) with respect to an application for a new stage 
carriage permit or a new public carriers permit. It is 
for the purpose of providing that the procedure to be 
followed in the case of an application made under sub-
section (81 is to be the same as the procedure to be 
followed in the case of an application for a new permit 
that sub-section (81 uses the words ""shall be treated as 
an application for the grant of a new permit. " By the 
use of these words what sub-section (8) does is to 
incorporate in it the provisions of sub- sections(3) to 
(7). This is a very different thing from enacting a legal 
fiction ......... " (Underlining is our.1) 
24. While stating the law as above, the learned Judges sought 
reliance upon the decision reported in Mis Shiv Chand Amolak Chand 
v. Regional Transport Authority & Anr. -(1983) 4 SCC 433 wherein 
a similar conclusion was arrived at while considering an application for 
variation by
way of extension of the route concerned covered by a 
scheme. The learned Judges therefore took the view ultimately in 
paragraph 17: 
"17 ....... Assuming. therefore, that m1 application for 
variation of the conditions of a permit referred to in 
sub-section (8) of Section 5 7 is to be deemed by a fiction 
of law to be an application for the grant of a new permit 
the question to which we must address ourselves is for 
what purpose is such an application for variation 
deemed to be an application for grant of a new permit. 
Reading sub-sections (3) to (8) of Section 57 as a whole. 
it is clear that the only purpose is to apply to such an 
gpplication for variation the procedure are.scribed by 
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sub-sections (3) to (7) of Section 57 and not for the 
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variation is granted, the permit so varied would be 
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deemed to be a new permit .......... " (Underlining is ours) 
25. Having thus answered the first question by holding that 
application for variation dealt with under Section 57(8) of the Act cannot 
be construed as an application for a new permit, the second question 
was answered in the said decision as under in paragraph 18: 
"18. Even though when the condition of a permit is 
allowed to be varied on an application made under sub-
section (8) of Section 57, the permit so varied is not a 
new permit, the question still remains whether in the 
case of an existing inter-State permit exempted under 
the said Scheme an increase in the number of trips or 
the number of vehicles allowed to be operated under 
such a permit would be inconsistent with the provisions 
of the said Scheme. We fail to see any inconsistency 
between an increase in the number of vehicles or trips 
allowed under such a permit and the provisions of the 
said Scheme. So far as the portions of the inter State 
route covered by the said Scheme are concerned. the 
permits of the existing permit-holders have been rendered 
ineffective. Furthe1; by the said Scheme as modified, 
the existing permit-holders are not allowed to pick up 
or set down passengers on these portions of the
notified 
routes. Whether one vehicle or more traverse these 
portions or whether the same vehicle traverses such 
portion more than once ca1111ot any ma11ner affect the 
services operated by the Appella11t on such portions 
since no passengers are allowed to be picked up or set 
down or such portions. All that would happe11 is that 
these vehicles, in the course of their inter-State operation 
would traverse these portions of the notified routes 
without in any way operating as stage carriages for 
such portions." 
26. Having thus noted the question posed and the answer rendered 
in the said decision, what is to be further noted is that though a detailed 
reference to the provisions contained in Chapter IV-A was made in the
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
17 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
said decision, before reaching the ultimate conclusion in paragraph 18, 
we find that there was no discussion as to the overriding effect of 
Chapter IV-A on Chapter IV as well as the freezing effect of Section 
68FF of the Act under the scheme with reference to the existing permit 
holders and their operations. We therefore wish to deal with the said 
aspect in detail in the later part of this judgment to find whether the said 
view expressed in 'JAYARAM' can be approved or disapproved. 
27. With that we come to the Constitution Bench decision in 
'ADARSH TRAVELS', the question posed for consideration is noted 
as under in the very first paragraph which is to the following effect: 
·· ..... The question for our consideration is, where a route 
is nationalised under Chapter IV-A of the Motor 
Vehicles Act, whether a private operator with a permit 
to ply a stage carriage over another route but which 
has a common overlapping sector with the nationalised 
route can ply his vehicle over that part of the 
overlapping common sector if he does not pick up or 
drop passengers on the overlapping part of the route? 
The answer to the question really turns on the terms of 
the sche111e rather than on the provisions of the statute, 
as we shall presently show." 
28. The Constitution Bench while dealing with the said question, 
made a detailed reference to the provisions contained in
Chapter IV-A 
and while making reference to Section 68C of the Act, observed as 
under in paragraph 5: 
"5 . ...... The policy of the legislature is clearfro111 Section 
68-C that the State Transport Undertaking may initiate 
a sche111e for the purpose of providing an efficient, 
adequate, economical and properly coordinated road 
transport service to be run and operated by the State 
Transport Undertaking in relation to any area or route 
or portion thereof It may do so if it is necessary in the 
public interest. The scheme may be to the exclusion, 
complete or partial, of other persons or otherwise. The 
scheme should give particulars of the nature of the 
service proposed to be rendered, the area or route 
proposed to be covered and such other particulars as 
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29. Thereafter in paragraph 6 it was held as under: 
"6. It is thus seen that while the provisions of Chapter 
JV-A are devised to override the provisions of Chapter 
JV and it is expressly so enacted, the provisions of 
Chapter IVA are clear and complete regarding the 
manner and effect of the "take over" of the operation 
or road transport service by the State Transport 
Undertaking in relation to any area or route or portion 
thereof While on the one hand, the paramount 
consideration is the public interest, the interest of the 
existing operators are sufficiently well- taken care of 
and such slight inconveniences to the travelling public 
as may be inevitable are sought to be reduced to a 
minimum ......... " (Emphasis added) 
30. A further reference can be made to the emphasis made by the 
Constitution Bench on the implication of Section 68C, Section 68D(3) 
and Section 68FF of the Act in the light of the definition of the expression 
'Route' in Section 2(28-A) oftheAct in paragraph 7. It will be useful to 
refer to the said part of the judgment which is to the following effect: 
"7. A careful and diligent perusal of sec. 68-C, sec. 68-
D(3) and sec.68FF in the light of the definition of the 
expression 'route' in sec.2(28-A) appears to make it 
manifestly clear that once a sche111e is published under 
sec. 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 State Transport Undertaking may operate on the 
notified area or notified route except as provided in the 
scheme itself A necessary consequence of these 
provisions is that no private operator can operate his 
vehicle on any part or portion of a notified area or 
notified route unless authorised so to do by the terms 
of the scheme itself He may not operate on anv part or 
portion of the notified route or area on the mere ground 
that the per111it as originally granted to him covered the 
notified route or area....... .. . ... ... ... . ... ... . The question
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
is one of weighing in the balance the advantages 
conferred on the public by the nationalisation of the 
route C-D against the inconveniences suffered by the 
public wanting to travel straight from A to B. On the 
other hand, it is quite well' known that under The guise 
of the so called 'corridor restrictions' permits over 
longer routes which cover shorter notified routes or 
'overlapping' parts of notified routes are more often 
than not misutilised since it is next nigh impossible to 
keep a proper check at every point of the route. It is 
also well known that often tin. ~s permits for plying stage 
carriages from a point a short distance beyond one 
terminus to a point a short distance beyond another 
terminus of a notified route have been applied for and 
granted subject to the so-called corridor restrictions. 
which are but mere ruses or traps to obtain permits and 
to frustrate the scheme. If indeed there is any need for 
protecting the travelling public from inconvenience as 
suggested by the learned counsel we have no doubt 
that the State Transport Undertaking and the 
Government will make a sufficient provision in the 
scheme itself to avoid inconvenience being caused to 
the travelling public." (Emphasis added) 
31. The Constitution Bench ultimately answered the question posed 
by it by holding as under in paragraph 8: 
"8 ...... It is impossible to accept the argument
that only 
the termini have to be looked at and the rest of the 
highway ignored in order to discover a route for the 
purposes of the Motor Vehicles Act. Equally without 
substance is the plea that if an operator does not pick 
up or set down any passenger between the two points 
of the common sector he cannot be said to be plying a 
state carriage between these two points. The argument 
is entirely devoid of substance for the simple reason 
that the operator does charge the passenger for the 
distance travelled along the highway between these two 
points also ........ " 
32. With that we shall now refer to the so-called conflicting 
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judgment viz., 'EGAPPAN' (supra). The facts in the said case are 
noted in paragraph 2, which requires to be noted and the same is extracted 
as under: 
"2. The facts of the case are these. 011 June 30, 1976, 
as stated earlier, the approved scheme was published 
under Section 68-D of the Act in the Tamil Nadu 
Government Gazette in re!>pect of the route Madurai to 
Kumuli authorising the appellant to run its stage 
carriages on that route. By that approved scheme it was 
proposed to exclude comp 'etely all other persons from 
operating their stage carriage services under permits 
covering the entire route, referred to above except those 
persons mentioned in A1111exure 11 to the said scheme 
without prejudice to any future modifications, variations 
etc. of their permits. The operators whose names had 
been mentioned in Annexure 11 to the scheme were 
persons who were existing operators on the different 
sectors of the not!fied route on the date of the 
publication of the scheme. The respondent ll'as not one 
of the those persons who was running a stage carriage 
service on any part or sector of the route in question 
on the date of its publication. Hence, his name was not 
mentioned in Annexure 11 to the scheme. He ll'as then 
operating a stage carriage service under a permit issued 
under the Act on the route Batlagundu to Usilampatti 
which was a non-scheme route. On February 28. 1981 
he was able to
secure the variation of the said permit 
from the Regional Transport Authority which enabled 
him to operate on the route measuring 21.4 Kms. from 
Usilampatti to Checkanurani, which formed a sector of 
the notified route. The appeal filed against the said 
order was dismissed and no revision petition was filed 
against the order dismissing the said appeal. On 
23.12.1982 he obtained from the Regional Trans- port 
Authoritv a second variation of his permit under which 
he was authorised to operate his stage carriage service 
over a distance of 16. 6. Kms. from Checkanurani to 
Madurai which was also a part of the notified route.
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
An appeal filed against that order was dismissed by the 
State Transport Appellate 'fribunal. A revision petition 
was filed under Section 64-B of the Act (as in force in 
the State of Tamil Nadu) before the High Court. The 
High Court dismissed the revision petition. This appeal 
by 5pecial leave is filed against the above order of the 
High Court. " (Underlining is ours) 
33. Thereafter, while dealing with.the provisions contained in 
Chapter IV-A, it was held as under in paragraph 4: 
"4 ............ In the context in wl'ich Section 68-F{l-D) 
appears we find it difficult to agree that the application 
for variation of a permit by including the whole or any 
part of route in respect of which a scheme is published 
under Section 68-C of the Act can be treated as falling 
outside the 111ischief of Section 68-F{l-D) of the Act. 
There is no justification to limit the application of Section 
68-F{l-D) of the Act to only applications for fresh 
per111its or their renewal and to leave out applications 
for variation of a permit by the inclusion of the route 
or a portion of the route in respect of which a scheme is 
published. The fact that the applicant is the holder of a 
permit to operate a stage carriage on another route 
whose variation he is seeking by the inclusion of a route 
or a part thereof in respect of which a sche111e is 
published under Section 68-C of the Act ought not
to 
make any difference. The principle underlying Section 
68-FO-D> of the Act is that the number of services on 
such a route should be frozen on the publication of a 
scheme under section 68-C of the Act. It is not, howeve1; 
necessary for us to pursue the applicability of Section 
68-F(l-D) of the Act to the present case any further 
since it is brought to our notice that the very same route 
is the subject-matter of the approved scheme published 
under Section 68-D of the Act on June 30, 1976 to which 
we have already adverted. The approved scheme, as 
mentioned earlier, excludes the operation by others of 
stage carriage services on the above mentioned route 
Madurai to Kumuli except those whose names are 
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mentioned in Annexure II attached thereto. The 
respondent is not protected by any provision in the 
approved scheme itself He cannot be permitted to 
operate on any sector of the notified route in question 
in view of the provisions contained in Sections 68-C, 
68-D and 68-FF Qf the Act. The effect of these provisions 
has been summarised bv a Constitution Bench of this 
Court in Adarsh Travels Bus Service and Another Vs. 
State of U.P. and Others, [19857 4 S.C.C. 557. 
Chinnappa Reddy, .!. speaking for the Constitution 
Bench observed at pt1ge 566 thus: ..... " (Emphasis 
C 
added) 
34. The very same paragraph which we have referred to in the 
Constitution Bench was extracted and the law was declared to the effect 
that once an approved scheme is published, the number of service on 
such a route is frozen on the publication of the scheme under Section 
D 68-C of the Act. It is also worthwhile to note that the word of caution 
expressed in 'ADARSII TRAVELS' in para 7 of that judgment has 
been found to have been abused in 'EGAPPAN' by getting two variations 
by a non-scheme operator successfully and was able to operate without 
any hindrance. 
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35. The last of the decision which requires to be noted in the 
present context is the one repo1ted in 'KSRTC' (supra). That was also 
a case where the route was covered by an approved scheme under 
Chapter IV-A of the Act. The respondents private operators applied for
variation of the conditions of their respective permits who were granted 
the variation, which resulted in permission to operate more trips in an 
application filed under Section 57(8) of the Act. The High Court declined 
to interfere and this Court after referring to the above referred to two 
judgments merely stated that the law laid down in 'ADARSII TRAVELS' 
does not apply to the facts of that case and without any discussion much 
less detailed discussion, dismissed the appeal. 
36. Having thus noted the various decisions covering this issue, 
we only wish to make a detailed reference to Section 57(8) of the Act 
and some of the provisions contained in Chapter IV-A of the Act viz., 
Section 68-B, 68-C, 68-D, 68-E, 68-F(lD) and 68-FF of the Act, which 
are as under:
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
"57(8) An application to vary the conditions of any 
permit, other than a temporary permit, by the inclusion 
of a new route or routes or a new area or, in the case of 
a stage carriage permit, by increasing the number of 
trips above the specified maximum, or by altering the 
route covered by it, or in the case of a contract carriage 
permit or a public carriers permit, by increasing the 
number of vehicles covered by the permit, shall be 
treated as an application for the grant of a new permit. 
Provided that it shall not be necessary so to treat an 
application made by the holder of a stage carriage 
permit who provides the only service on any route or in 
any area to increase the frequency of the service so 
provided, without any increase in the number of 
vehicles. " 
***** 
68B. Chapter IVA to over ride Chapter IV and other 
laws:- The provisions of this Chapter and the rules and 
orders 
made 
thereunder 
shall 
have 
effect 
notwithstanding anything inconsistent therewith 
contained in Chapter IV of this Act or in any other lmv 
for the time being in force or in any instrument having 
effect by virtue of any such law. 
68C. Preparation and publication of scheme of road 
transport service of State transport undertaking. Where 
any State transport undertaking is of opinion that for 
the purpose of providing an efficient, adequate, 
economical and properly coordinated road
transport 
service, it is necessary in the pub,lic interest that road 
transport services in general or any particular class of 
such service in relation to any area or route or portion 
thereof should be run and operated by the State 
transport undertaking, whether to the exclusion, 
complete or partial, of other persons or otherwise, the 
State transport undertaking may prepare a scheme 
giving particulars of the nature of the services proposed 
to be rendered, the area or route proposed to be covered 
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and such other particulars respecting thereto as may 
be prescribed, and shall cause every such scheme to be 
published in the Official Gazette and also in such other 
manner as the State Government may direct. 
68D. Objection to the scheme. (1) On the publication 
B 
of any scheme in the Official Gazette and in not less 
than one newspaper in regional language circulating 
in the area or route which is proposed to be covered by 
such scheme,-
(i) any person already providing transport facilities by 
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any means along or near the area or route proposed to 
be covered by the scheme; 
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(ii) any association representing persons interested in 
the provision of road transport facilities recognised in 
this behalf by the State Government ; and 
(iii) any local authority or police authority within whose 
iurisdiction any part of the area or route proposed to 
be covered by the scheme lies, may, within thirty days 
from the date of its publication in the Official Gazette, 
file objections to it .before the State Government. 
(2) The State Government may, after considering the 
objections and after giving an opportunity to the 
objector or his representatives and the representatives 
of the State transport undertaking to be heard in the 
matter, if they so desire, approve or modify the scheme. 
(3) The scheme as approved or modified under sub-
section (2) shall then be published in the Official 
Gazette by the State
Government and the same shall 
thereupon become final and shall be called the 
approved scheme and the area or route to which it relates 
shall be called the notified area or notified route : 
Provided that no such scheme which relates to any inter-
State route shall be deemed to be an approved scheme 
unless it has been published in the Official Gazette with 
the previous approval of the Central Government. "
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
68E. Cancellation or modification of scheme:- (1) Any 
scheme published under sub-section (3) of section 68D 
may at any time be cancelled or modified by the State 
transport undertaking and the procedure laid down in 
section 68C and section of 68D shall, so far as it can 
be made applicable, be followed in every case where 
the scheme is proposed to be cancelled or modified as 
if the proposal were a separate sche111e: 
Provided that the State Transport Undertaking may, with 
the previous approval of the State Government, modify 
without following the procedure laid down in section 
68C and section 68D, any such scheme relating to any 
route or area in respect of which the road transport 
services are run and operated by the State Transport 
Undertaking to the complete exclusion of other persons 
in re5pect of the following 111atters, namely:-
( a) increase in the number of vehicles or the number of 
trips; 
(b) change in the type of vehicles without reducing the 
seating capacity ; 
(c) extension of the route or area, without reducing the 
frequency of the service ; or 
(d) alteration of the time-table without reducing the 
frequency of the service.} 
(2) Notwithstanding anything contained in sub-section 
(1), the State Government may, at any time, (fit considers 
necessary in the public interest so to do, modify any 
scheme published under subsection (3) of section 68D, 
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. 
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68F(J-D) Save as otherwise provided in sub-section (IA) 
or subsection (IC), no permit shall, be granted or 
renewed during the period interevening between the date 
of publication, under section 68C of any scheme and 
the date of publication of the approved or modified 
scheme, in favour of any person for any class of road 
transport service in relation to an area or route or 
portion thereof covered by such scheme : 
Provided that where the period of operation of a permit 
in relation to any area, route or portion thereof specified 
in a scheme published under section 68C expires after 
such publication, such permit may be renewed for a 
limited period, but the permit so renewed shall cease to 
be effective on the publication of the scheme under sub-
section (3) of section 68D.} 
***** 
68FR Restriction on grant of permits in respect of a 
notified area or notified route, Where a scheme has been 
published under sub-section (3) of section 68D in 
respect of any notified area or notified route, the State 
Transport Authority or the Regional Tramport Authority, 
as the case may be, shall not grant any permit except in 
accordance with the provisions of the scheme; 
Provided that where no application for a permit has 
been made by the State Transport Undertaking in 
respect of any notified area or notified route in 
pursuance of an approved scheme, the State Transport 
Authority or the Regional Transport
Authority, 'as the 
case may be, may grant tempora1y permits to any person 
in respect of such notified area or notified route subject 
to the' condition that such permit shall cease to be 
effective on the issue of a permit to the State Transport 
Undertaking in re~pect of that area or route. " 
37. At th is juncture, it is necessary to state that in the decision in 
'JAYARAM' and 'ADARSII TRAVELS', this Court has extensively 
covered the scheme of the provisions contained both under Chapter IV 
as well as Chapter IV-A of the Act. Therefore, the said part of the
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
above referred to decisions can be noted and followed without making 
any further reference to the scheme of the provisions contained in those 
chapters. However, for the purpose of deciding this reference, it is 
necessary for us to refer to the above provisions which we have extracted 
and analyse the prescriptions contained in those provisions in order to 
give our answer to the questions referred. 
38. (i) In the first instance, we take up sub-section (8) of Section 
57 of the Act. A close reading of the said sub-section shows that an 
application for variation of any permit in the case of a stage carriage, for 
the purpose of increasing the number of trips as well as numberofvehicles 
covered by the permit, with which we are concerned, mandatorily to be 
treated as an application for the grant of a new permit. Going by the 
caption of Section 57 of the Act, one may tend to think that it is merely 
a procedure when anyone apply for grant of permit, which includes stage 
carriage permit. But, when we make a close reading of the sub-sections 
(I) to (7), we can presently demonstrate how such provisions mandates 
compliance of various SJJ.ecitic requirements, which are intricately 
connected, with the grant of a new permit, which are to be 'mutatis 
mutandis' to be complied with even in respect of an application for 
variation, which is governed by sub-section (8). Sub-section (2)
stipulates 
that an application for variation in a stage carriage permit should be 
made not less than six weeks before the date on which it is desired that 
the permit shall take effect. Therefore, when an application for variation 
like the present one with which we are concerned viz., increasing the 
number of trips or increasing the number of vehicles, the applicant must 
specify the date from which he desires such variation to take effect and 
that tiling of the application should be mandatorily made by giving not 
less than six weeks time gap from the desired date of the applicant for 
the varied condition to take effect. 
(ii) Under sub-section (3), once the Regional Transport Authority 
receives an application for variation ofa stage carriage permit, statutorily 
the Authority should make the application available for inspection at the 
office of the Authority and should also publish the application or the 
substance of it in the manner prescribed under the Rules together with 
the notice of the date before which representation in connection with 
such application for variation should be submitted. In that respect, period 
of 30 days should be prescribed by the Regional Transport Authority 
from the date of the publication apart from specifying the time and the 
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place where the application along with the representation whatever 
received would be considered by him. We are not concerned with the 
proviso to sub-section (3) which has nothing to do with the consideration 
of an application for variation. 
(iii) When we refer to sub-section ( 4), here again we find that the 
mandatory requirement for consideration of any representation made in 
connection with an application for variation, should have been submitted 
before the appointed date and also ensured that a copy of such 
representation was simultaneously furnished to the applicant who applied 
for the variation. 
(iv) Under sub-section (5) when any representation as provided 
for in sub-section (3) is made as stipulated under sub-sections (3) and 
(4), then it is mandated on the Regional Transport Authority to dispose 
of the application at a public hearing where the applicant, as well as, the 
person who made the representation is entitled for an opportunity of 
personal hearing either in person or by a duly authorized representative. 
We are not concerned with sub-section (6), which pertains to contract 
carriage permits. 
(v) Under sub-section (7), in the event of the Regional Transpo11 
Authority rejecting an application for variation, he should give reasons in 
writing for such rejection. 
39. Therefore, a conspectus consideration of sub-sections (1) to 
(5) and (7) along with sub-section (8) shows that an
application for 
variation when treated as an application for the grant of a new permit, 
all the mandatory requirements which are to be followed for the grant of 
a new permit have to be followed in letter and spirit even with reference 
to an application for variation viz., in the case on hand for either increasing 
the trips as well as for increasing the number of vehicles. It is not as if 
such procedures prescribed in sub-sections ( 1) to (7) barring sub-section 
(6) such procedures are to be followed casually and that the same would 
ultimately result in grant of variation irrespective of compliance or non-
compliance of such rigorous procedures. If the prescription of the time 
limit, specified in sub-section (2) is not complied with, it may result in 
instantaneous invalidation of the application attheve1ythreshold. Similarly, 
if the Regional Transport Authority failed to follow the statutory 
prescription in the matter of pub I ication of such an application, by following 
the time limit and the other prescribed procedure under the Rules, then
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [F AKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
again, the consideration of the application itself may not take place until 
such prescriptions are meticulously followed and complied with. Then 
again, under sub-section ( 4) anyone who wants to make a representation 
as against the grant of variation will have to strictly follow the time limit 
viz., filing of such representation before the appointed date as notified 
by the Regional Transport Authority and that while filing such 
representation, it must be ensured that simultaneously a copy was served 
on the applicant, failure to follow such prescription will automatically 
result in rejection of the right of hearing or right of consideration of any 
such representation with reference to the application for variation. 
40. The requirement of giving a public hearing coupled with 
requirement of personal hearing to the applicant as well as the person 
making the representation is yet another prescription which again shows 
that very serious consideration should be given to the application for 
variation in as much as it will have very serious impact on the operation 
of the vehicle in the route in question in the event of such variation being 
granted, anyone living in that area can voice his grievance or support 
before the Regional Transport Authority in such a public hearing. In 
other words the very purpose of the requirement of providing a public 
hearing in sub-section (5)
shows that an application for variation is not 
merely concerned with the applicant alone or anyone who wants to raise 
his objections by way of representation to any such application for 
variation. But, it will open up the scope for every member of a public in 
the locality concerned to raise his voice in the public hearing which may 
have serious repercussions in the event of the variation being granted or 
not granted, which the Regional Transport Authority would be otherwise 
bound to consider before he pass an order in the application for variation 
by giving adequate reasons for grant or otherwise of such application 
for variation. Similarly, the representatives may be another exempted 
operator or the State owned Corporation, who can raise their objection 
and point out how the grant of variation will not serve the public at large 
or create inefficiency or uneconomical and resu It in lack of coordination. 
41. Having thus analysed the entire Section 57 of the Act barring 
sub-section (6) and sub-sections (9) and (10), it must be stated that 
though in sub-section (8), it is stated that an application for variation 
should be treated as an application for the grant of a new permit, in 
effect, such consideration of an application for variation would be nothing 
but an application for the grant of a new permit as every required step 
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for the grant of a new permit will have to be applied and scrupulously 
followed in order to consider an application for variation and for its ultimate 
disposal. 
42. Therefore, we are not in a position to approve of the conclusion 
in 'JAYARAM' to the effect that the application for variation in spite of 
such specifications and requirements to be complied and carried out 
under various sub-sections of Section 57 of the Act, it is merely a fictional 
requirement and will not amount to requirement strictly to be followed 
and applied in the case of grant of a new permit. We therefore overrule 
such a conclusion reached in 'JAYARA./11'. We also state that the contra 
opinion expressed in 'RAGIIURAM' will hold good. 
43. With that when we come to the other Sections with which we 
want to make an analysis, in the foremost, reference to Section 68-8 of 
the Act has to be made which falls under Chapter IV-A and which 
states that all the provisions contained in Chapter IV-A shall have 
supervening effects on any inconsistent provisions contained in Chapter 
IV or any other law for the time being in force or in any instrument 
having effect by virtue of any such law. Under Chapter IV Sections 42 
to 68 of the Act have been listed. In so far as, Section 57(8) of the Act, 
as has been noted by us and the manner in which we interpret it, we can 
safely hold that there wi II be no inconsistency with any of the
provisions 
contained in Chapter IV-A. We can therefore safely proceed that the 
said Section 57 will apply in all force even in respect of the prescription 
contained in the provisions under Chapter IV-A viz., Section 68A to 681 
of the Act. 
44. Keeping the said broad statutory prescription vis-a-vis Section 
57 of the Act, when we proceed to analyse Section 68C of the Act, we 
find that the formulation of a scheme is to be prepared and published by 
a State Transport Undertaking in respect of the services to be provided 
in any area or route to be covered. The underlying object for such 
formulation of a scheme for its preparation and publication, must be for 
providing an EFFICIENT, ADEQUATE, ECONOMICAL and 
PROPERLY coordinated road transport service with the paramount 
consideration of public interest and such scheme should be prepared 
and published. Section 68C of the Act, therefore, at the very inception 
of the formulation ofa scheme by a State Transport Undertaking, should 
have the basic consideration of efficient, adequate, economical and 
properly coordinated transport service in public interest. Once such a
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM_KALIFULLA, J.] 
scheme is formulated with the above avowed objects in mind and is 
notified, under Section 68D, on the publication of such a scheme in the 
official gazette as well as in the newspaper in the regional language 
circulating in the area or route, which is proposed to be covered by such 
scheme, every person who is already providing transport facility in that 
area or route or any association representing persons interested in the 
provision of road transport facilities recognized by the State as well as 
the local authority or police authority who are also located in that area or 
route, will be entitled to raise their objections or their representations 
within 30 days from the date of publication to the State Government. 
45. Under sub-section (2) of Section 68D of the Act, the State 
Government after considering the objections and after giving an 
opportunity of hearing to the objector or his representative as well as the 
representatives of the State Transport Unde11akings can either approve 
the scheme as proposed or give a modified scheme. Under Section 68£ 
of the Act, the scheme can be cancelled in the form in which it was 
approved or can be modified by following the very same procedure 
prescribed under sub-sections 68C and 68D of the Act. However, the 
State Transport Undertaking with the previous approval of the State 
Government can modify the scheme without following the
procedure 
laid down in Section 68C and 68D of the Act under the proviso to Section 
68E. That apart under sub-section (2) of Section 68£ of the Act, the 
State Government is fully empowered to modify any scheme published 
. under sub-section (3) ofSection 68D of the Act after giving an opportunity 
of hearing to the State Transport Undertaking, as well as, to any other 
person who in the opinion of the State Government is likely to be affected 
by the proposed modification. Once the approved scheme comes into 
effect, under Section 68F of the Act, the State Transport Undertakings 
can be issued with the required permits. 
46. Section 68FF of the Act is an important section which requires 
to be noted with some deeper scrutiny. Section 68FF creates a restriction 
on grant of permits in respect of notified area or notified route. A close 
reading of the said provision discloses that where an approved scheme 
as stipulated under Section 68D(3) of the Act in respect of an area or a 
route is published, then, it prohibits grant of any permit except in 
accordance with the provisions of this scheme. The substantive part of 
Section 68FF therefore makes it clear that once the approved scheme 
comes into play, then, there will not be any scope for grant of any permit 
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in that area or the route covered by the scheme, except what is specifically 
permitted or provided under that scheme itself. By way of an analogy, it 
can be stated that where, under the scheme while the State Transport 
Undertaking alone is exclusively permitted to operate the service in any 
particular area or route and even while providing for such exclusive 
operation by State Transport Undertaking, ifthe operation by any existing 
permit holder is saved either fully or partially that as rightly stated in 
'RAGIIURAM' and 'EGAPPAN', such operation by other private 
operators gets frozen and as was held by us earlier, while interpreting 
Section 57 (8) of the Act that application for variation will be nothing but 
an application for grant of a new permit. Therefore, even in respect of 
protected operation under the scheme of any existing operator, as on the 
date of the approved scheme, he will have to restrict his operations to 
the extent to which he was permitted as on that date and the manner in 
which such operation was permitted and not beyond. 
47. Once things get frozen, the frozen stage can be changed only 
by way of a permitted process. Here, when by virtue of Section 68FF 
of the Act, the permit stood frozen, as on the date the scheme was 
published, then, ifthe said frozen stage is to be altered or modified, the 
provision by which such modification or alteration can be effected can 
be only
by applying Section 68E, which is the legally permissible manner 
in which such frozen stage can be altered or modified. Any other manner 
in which the said frozen stage is sought to be altered or modified, that is 
totally prohibited under the statutory provisions. Therefore, ifunder the 
scheme, ifthe permit gets frozen, within the prescriptions contained under 
the scheme and if a variation is to be considered forthat permit either by 
way of increase in the number of trips or addition of vehicle without any 
modification or alteration effected under Section 68E of the Act, it will 
be wholly prohibited under the provisions falling under Chapter IV-A 
and consequently, such variation applied for can never even be considered 
by any of the authorities. That will be the consequential effect of the 
application of Section 68FF of the Act and other relevant provisions 
falling under Chapter JV-A. In our considered opinion, any other 
interpretation would run contrary to the prescription contained in Chapter 
IV-A of the Motor Vehicles Act. 
48. While interpreting Section 68FF of the Act, therefore we are 
convinced that that is the only manner in which an interpretation to the 
said Section 68FF can be made and in no other manner. The only other
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
alternate available is what is provided under Section 68E of the Act 
which again is within the jurisdiction of the State Trans po ii Unde1iaking 
or the State Government under sub section 1 or 2 as the case may be. 
49. As we are not called upon to answer any other question, we 
confine ourselves to the question viz., on the publication of an approved 
scheme whether the number of the trips of the vehicles of the existing 
operators can be increased by granting the variation of the permit even 
when the existing operators are allowed to carry on their operation on 
the date of the publication of the scheme as it was existing as on that 
date. To the said question, one other aspect to be considered is along 
with the number of trips can such existing operator aspire to seek for 
increasing the number of vehicles as well should also be added. In fact, 
when the question of conflict as between 'JAYARAM' and 'EGAPPAN' 
was noted while making the present reference to the Constitution Bench 
in the order dated 22.07 .2003, the conflict really pe1iain to the variation 
applied for both by way of increase in trips as well as increase of vehicles. 
50. Having analysed the above referred to decisions and the 
statutory provisions, before rendering our final answer to the question 
referred to this Constitution Bench, it will be worthwhile to make a 
reference and list out the legal
propositions which we are able to discern 
based on our detailed consideration in this reference: 
(a)Chapter IV-A supersedes any inconsistent provisions in 
Chapter IV. 
(b)The policy of the Legislature is clear from Section 68C 
that the State Transport Undertaking may initiate a 
scheme for the purpose of providing an efficient, 
adequate, cconomical and properly coordinated road 
transp01i service to be run and operated by the State 
Transpo1i Undertaking in relation to any area or route or 
portion thereof. It may do so if it is necessary in the 
public interest. 
(c) Grant of variation under Section 57(8) will be as good 
as grant of a new permit. 
(d)Section 57(8) is controlled by Section 68FF falling under 
Chapter IV-A, by virtue of the superseding effect of 
Section 68B also falling under Chapter IVA 
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A 
(e)Once a scheme formulated under Section 68D gets 
approved under 680(3) of Chapter IVA, then all the 
permits in the route I area covered by the scheme will 
get frozen by virtue of operation of Section 68FF. 
(f)The effect of Section 68FF can be altered I modified I 
B 
-cancelled only in the manner as provided for under Section 
68E and in no other manner. 
(g)By viltue of the above, either a grant of a new permit or 
the variation of an existing permit of private operator 
cannot be ordered in respect of an area or route covered 
C 
by an Approved Scheme. 
(h)Increase in the number of trips or vehicles which were 
being run under the existing exempted permit under a 
Scheme will amount to grant of a new permit to operate 
one more Stage Carriage which is not permissible under 
D 
Section 68FF. 
(i)The proposition of law, laid down by this Court in 
'JAYARAM' impliedly stood overruled in 'AJJARSH 
TRAVELS'. 
U)The econo111y and coordination, two of the factors, which 
E 
govern the Approved Scheme, will be seriously infringed 
if the variation is to be granted of the existing permit 
condition. 
(k)Even if there is an interstate agreement under Section 
63 of the Act for increasing the number of trips, such an 
F 
agreement cannot override the provisions of Chapter IV-
A by viltue of Section 688 of the Act. Section 63 being 
in Chapter IV of the Act, the Scheme approved under 
Chapter IV-A will prevail over it. 
(I) The
Approved Scheme will exclude the operation of other 
G 
stage carriage services on the Route I Area covered by 
the Scheme, except those whose names are mentioned 
in the Scheme and to the extent to which such exception 
is allowed. 
(m)The provisions in Chapter IV-A are devised to override 
H
G.T. VENKATASWAMY REDDY v. STATE TRANSPORT 
AUTHORITY [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] 
the provisions of Chapter IV and it is expressly so enacted, 
the provisions of Chapter IV-A are clear and complete 
regarding the manner and effect of the "takeover" of 
the operation of a road transport service by the State 
Transport Undertaking in relation to any Area or Route 
or portion thereof (ADARSII TRAVELS). 
(n)A necessary consequence of those 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 term of the scheme itself. He 
may not operate on any part or portion of the notified 
Route or Area on the mere ground that the permit as 
originally granted to him covered the notified Route or 
Area (ADARSH TRAVELS). 
51. Having regard to the above propositions, which we are able to 
arrive at, we hold that the judgment reported in K"m"J"k" SJ(lfe Ro(/d 
Tmnsport Corpor(lfion, B(/ng(l/ore Vs. B.A. J"y"r"m ""d others -
1984 (Supp) SCC 244 is no longer a good law and the decision reported 
in P(lnt/iy"n Rofldw"ys Corpor"tion Ltd. Vs. M.A. Egappfln - (1987) 
2 SCC 47 stands approved which is in tune with the Constitution Bench 
decision reported in Ad(lrslt Travels Bus Service (/lld <motlier Vs. St(lfe 
of U.P. and otlters - (1985) 4 sec 557 and the observations made in 
R.Raglmram Vs. P. Jayarama Naidu am/ ot!ters -1990 (supp) SCC 
361 ?tands approved. 
52. The reference is
answered as above. Having thus answered 
the reference, we direct the Registry to list the cases before the regular 
Bench for disposal by applying the principles set down in this judgment 
wherever it is applicable. 
Devika Gujral 
Referred question a~swered. 
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