Supreme Court says law bars private buses between MP and UP along UPSRTC notified routes; asks States to find solution

The Supreme Court recently held that private bus operators cannot be granted permits to ply on inter-State routes between Madhya Pradesh and Uttar Pradesh that overlap any portion of routes notified in favour of the Uttar Pradesh State Road Transport Corporation (UPSRTC) [UP State Road Transport Corporation vs. Kashmiri Lal Batra & Ors.]. .A Bench of Justices Dipankar Datta and AG Masih said that reciprocal transport agreements executed by States under Section 88 of the Motor Vehicles Act, 1988 cannot override approved schemes or notified routes framed under Chapter VI of the Act. It set aside multiple orders by the Madhya Pradesh High Court that had directed Uttar Pradesh transport authorities to countersign permits issued by the Madhya Pradesh State Transport Authority (STA) in favour of private operators.However, it also acknowledged that the issue cannot be viewed through a purely legal lens since barring private buses could impact passenger convenience.Hence, it directed both States to explore options for resolving the issue administratively and to consider limited modifications to facilitate passenger convenience without undermining the statutory bar against private operation on notified routes.“We reiterate, these being matters of policy, should be left to both the States to decide and we do hereby reserve it for their consideration,” the Bench concluded..The appeals before the Court arose from a 2006 inter-State reciprocal transport agreement between Madhya Pradesh and Uttar Pradesh. The agreement, executed under Section 88 of the Motor Vehicles Act, had earmarked routes under two schedules - Schedule A for private operators and Schedule B for the Madhya Pradesh State Road Transport Corporation (MPSRTC). After MPSRTC was wound up, private operators sought permits to ply on the Schedule B routes, arguing that these routes automatically stood transferred to Schedule A. Although the Madhya Pradesh STA granted temporary permits, the Uttar Pradesh STA refused to countersign them, leading to a series of writ petitions and appeals..One of those petitions filed before the Madhya Pradesh High Court sought a directions to the Uttar Pradesh authorities to countersign the permits issued by Madhya Pradesh. The High Court, while entertaining the matter as a public interest litigation, directed the State of Madhya Pradesh to process permanent permits on those routes and ordered Uttar Pradesh to countersign them within fifteen days. Similar directions were issued in other connected petitions, prompting the UPSRTC to move the Supreme Court..Before the Supreme Court, the counsel for the UPSRTC argued that private operators have no right to ply their buses even on portions of notified routes reserved under Chapter VI of the Motor Vehicles Act. They relied on precedents holding that inter-State agreements are not law and cannot prevail over nationalisation schemes. The counsel for the private permit holders contended that once the MPSRTC was wound up, the routes in question should have been made available for private operation under the terms of the 2006 agreement..After examining the statutory framework and case laws, the Bench reaffirmed that Chapter VI of the Motor Vehicles Act overrides Chapter V. It noted that reciprocal transport agreements under Section 88, being mere agreements between States, cannot displace or dilute approved schemes notified under Chapter VI.The Bench also held that no permit or renewal of permit can be granted to private operators on any part of a route notified in favour of a State undertaking.“While no permission can be granted at this stage to any private operator having a permit issued by the STA, MP to ply his vehicle on an inter-State route connecting two cities in the neighbouring States, which overlaps any notified intra-State route in the State of UP, we are inclined to the view that much can be achieved through dialogue between the two States,” the Court said.It observed that the issue was not merely legal but required administrative coordination between the States. It directed the principal secretaries of the Transport Departments of Madhya Pradesh and Uttar Pradesh to meet within three months to discuss how the inter-State reciprocal agreement could be worked out in a manner that serves public interest. The Bench clarified that if it is conclusively established that MPSRTC has been wound up, both States may consider modifying the existing agreement to allow private operators on the routes previously reserved for the Corporation. “If indeed, the transport authorities of the State of MP satisfy the transport authorities of the State of UP that the MPSRTC has been wound up or is on the verge of being wound up and, therefore, not in a position to ply stage carriages on the routes earmarked for it, appropriate decision may be taken to include the routes in Annexure B of the IS-RT Agreement in Annexure A thereof and measures taken to give effect to such inclusion,” the Bench said..The Court ultimately set aside the orders of the Madhya Pradesh High Court and dismissed pending writ petitions filed by other operators. It directed both States to explore options for resolving the issue administratively so that passengers are not affected..The UPSRTC was represented by Senior Advocate Shobha Gupta along with advocates Ankit Anandraj Shah, Arpit Bamal, Vaibhav Pareek, Tarun Arora, Gitesh Marwah, Shyamal Kumar, Nishit Agrawal, Kanishka Mittal, Shrey Kapoor, Upasna Agrawal, Deepti Rathi and Shadab Khan.The respondents were represented by was represented by Additional Advocate General Sansriti Pathak and Senior Advocate Nikhil Goel along with advocates Rani Chhabra, Deepkaran Dalal, Milind Kumar, Sarthak Raizada Ga, Sarad Kumar Singhania, Rashmi Singhania, Yashraj Singh Bundela, Pradeep Misra, Manoj Kumar Mishra, Daleep Dhyani, Suraj Singh, Shagufa Khan, Aman Prasad, Nidhi Jaswal, Girish Malviya, Rohit Amit Sthalekar, Ridhi Jain, Prithvi Pal, Abhay Singh and Ankita Agarwal..[Read Judgment]