SC Bars Private Buses on Notified Inter-State Routes; Upholds State Transport Corporations’ Exclusive Rights

The appeals arose from multiple judgments of the High Court and a writ petition under Article 32 concerning the operation of private stage carriages on certain interstate routes between Madhya Pradesh and Uttar Pradesh. Under an interstate reciprocal transport agreement executed in 2006, routes were divided between State Transport Undertakings and private operators. Following the winding up of the Madhya Pradesh State Road Transport Corporation (MPSRTC), certain routes earlier reserved for it were de-notified, and private operators sought inclusion of these routes for their operation. The Madhya Pradesh State Transport Authority (STA, MP) granted temporary permits, but the Uttar Pradesh State Transport Authority (STA, UP) refused to countersign them.

The High Court directed the Madhya Pradesh authorities to issue permanent permits and Uttar Pradesh to countersign them. The U.P. State Road Transport Corporation (UPSRTC) challenged these directions before the Supreme Court, contending that no private operator could ply on any portion of a notified route reserved for State Transport Undertakings under Chapter VI of the Motor Vehicles Act, 1988. The private operators countered that the interstate agreement entitled them to permits after the MPSRTC ceased operations.

Main Issue: Whether private stage carriage operators can be granted interstate permits under an interstate reciprocal transport agreement when such routes overlap notified intrastate routes reserved for State Transport Undertakings.

SC’s Decision: The Supreme Court held that an interstate reciprocal transport agreement (IS-RT) cannot override the statutory provisions of Chapter VI of the Motor Vehicles Act, 1988. Since Chapter VI has an overriding effect over Chapter V, any approved scheme notifying routes for State Transport Undertakings prevails over such interstate agreements. The Court relied on precedents, including Adarsh Travels Bus Services v. State of Uttar Pradesh (1985) and T.V. Nataraj v. State of Karnataka (1994), which settled that private operators cannot operate even on overlapping portions of notified routes unless specifically permitted.

Therefore, the Court set aside the impugned High Court orders and dismissed the writ petition. However, emphasizing public interest and interstate coordination, the Court directed the Principal Secretaries of the Transport Departments of Uttar Pradesh and Madhya Pradesh to hold consultations within three months to explore modification of the interstate agreement if the MPSRTC has indeed been wound up, thereby balancing public convenience and statutory compliance.

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