J.S. Khehar and Arun Mishra, JJ

MANU/SC/1199/2014
Equivalent Citation: I(2015)AC C 148(SC ), 2015IX AD (S.C .) 393, AIR2015SC 767, 2015(1) AKR 516, 2015(2)ALD207(SC ), 2015(1) An.W.R.
346(SC ), 2015 (2) AWC 1426 (SC ), 2015(4)C DR934(SC ), (2015)1MLJ361, 2015(1)RC R(C ivil)336, 2014(14)SC ALE314, (2015)4SC C 515, 2015 (1)
SC J 233
IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 11690-11712 of 2014 (Arising out of SLP (C) Nos. 20539-
20561/2011), Civil Appeal No. 11719/2014 (Arising out of SLP (C) No. 17316/2011,
Civil Appeal Nos. 11714-16/2014 (Arising out of SLP (C) Nos. 17119-17121/2011,
Civil Appeal No. 11725/2014 (Arising out of SLP (C) No. 17342/2011, Civil Appeal
No. 11722/2014 (Arising out of SLP (C) No. 17339/2011, Civil Appeal No.
11728/2014 (Arising out of SLP (C) No. 19083/2011, Civil Appeal No. 11730/2014
(Arising out of SLP (C) No. 19084/2011, Civil Appeal No. 11753/2014 (Arising out of
SLP (C) No. 20569/2011, Civil Appeal No. 11771/2014 (Arising out of SLP (C) No.
20994/2011, Civil Appeal Nos. 11736-740/2014 (Arising out of SLP (C) Nos. 19959-
20992/2011, Civil Appeal Nos. 11745-11775/2014 (Arising out of SLP (C) Nos.
20562-20568/2011, Civil Appeal Nos. 11774-89/2014 (Arising out of SLP (C) Nos.
20996-21011/2011, Civil Appeal No. 11742/2014 (Arising out of SLP (C) No.
20193/2011, Civil Appeal No. 11792/2014 (Arising out of SLP (C) No. 28339/2011,
Nos. 11796-97/2014 (Arising out of SLP (C) Nos. 2267-2268/2012, Civil Appeal No.
11799/2014 (Arising out of SLP (C) No. 6776/2012, Civil Appeal No. 11803-05/2014
(Arising out of SLP (C) Nos. 9744-9746/2012, Civil Appeal No. 11801/2014 (Arising
out of SLP (C) No. 7108/2012, Civil Appeal No. 11815/2014 (Arising out of SLP (C)
No. 22436/2012, Civil Appeal No. 11813/2014 (Arising out of SLP (C) No.
16744/2012, Civil Appeal No. 11811/2014 (Arising out of SLP (C) No. 17918/2012,
No. 11817/2014 (Arising out of SLP (C) No. 28859/2012) and Civil Appeal Nos.
11822-35/2014 (Arising out of SLP (C) Nos. 31092-31105/2013
Decided On: 18.12.2014
Appellants: B.A. Linga Reddy
Vs.
Respondent: Karnataka State Transport Authority
Hon'ble Judges/Coram:
J.S. Khehar and Arun Mishra, JJ.
Case Note:
Motor Vehicles - Modification of scheme - Section 102 of Motor Vehicles Act,
1988 - High Court had quashed orders modifying scheme called Bellary
Scheme, Kolar Scheme, Bangalore and Kanakpura Plans, modification of
scheme called Mysore Scheme, BTS Scheme by notification - Hence, present
appeal - Whether State Government while modifying scheme under Section
102 of Act was required to assign reasons while modifying existing scheme
- Held, modification of scheme was quasi-judicial function while modifying
or cancelling scheme - State Government was duty-bound to consider
objections and to give reasons either to accept or reject them - Rule of
19-11-2020 (Page 1 of 19) www.manupatra.com WBNUJS Library & Information Centre

reason was anti-thesis to arbitrariness in action and was necessary
concomitant of principles of natural justice - Apparent that there was no
consideration of objections except mentioning arguments of rival parties -
Situation was worse in orders modifying other schemes - Thus, modification
of Schemes could not be said to be in accordance with principles of natural
justice in absence of reasons so as to reach conclusion that private
operators were meeting genuine demands of public in excess of service
provided by STOs., hence, it could not be said to be sustainable - State
Government hear objections, consider and decided same in accordance with
law by reasoned order - Appeal dismissed. [paras 18, 19, 28 and 29]
Case Category:
ORDINARY CIVIL MATTER - STAGE CARRIAGE PERMITS
JUDGMENT
Arun Mishra, J.
1. Leave granted in all the SLPs.
2 . The question involved in the appeals is whether the State Government while
modifying the scheme Under Section 102 of the Motor Vehicles Act, 1988 (hereinafter
referred to as 'the Act of 1988') is required to assign reasons while modifying the
existing scheme. The High Court of Karnataka has quashed the orders modifying the
scheme called Bellary Scheme notified in the Gazette dated 26.7.2003; Kolar Scheme
notified on 7.11.2003; Bangalore and Kanakpura Plans as notified on 11.11.2003,
modification of the scheme called Mysore Scheme, BTS Scheme by notification dated
31.5.2007.
3. The Bellary Scheme was initially notified on 31.10.1962 by Karnataka State Road
Transport Corporation, Bangalore, (for short 'KSRTC') Under Section 68C of the Motor
Vehicles Act, 1939 (hereinafter referred to as 'the Act of 1939') by which it was
proposed to operate stage carriage services on 86 routes in Bellary sector for the
purpose of providing efficient, adequate, and economical road transport services. The
Government approved the scheme and published it in the Gazette dated 18.4.1964.
The scheme provided for operation of services by the State Transport Undertakings
only and no exemption had been provided therein for operation of services by the
State Transport Undertakings of other States and the existing inter-State private
operators. The said Scheme was modified on 10.1.1980 Under Section 68E of the Act
of 1939 providing for operation of services by permit-holders who had been granted
permits by the Transport Authorities on the date of publication on the basis of inter-
State agreements entered into by the Government of any other State provided that
the operators on such route shall not be permitted to operate on the routes which
overlap any portion of the notified routes. The Government further modified the
approved scheme on 31.3.2000 under Section 102(1) of the Act of 1988. A provision
was made for operation of the services by permit-holders who had been granted
permits to ply their vehicles on inter-State routes, with a condition not to pick up or
set down the passengers on any portion of the routes overlapping the notified routes.
4. Thereafter, Under Section 102(2) of the Act of 1988, a proposal was published in
the Gazette dated 26.10.2002 to modify the said Scheme. Objections and
representations were invited. KSRTC also filed detailed objections with respect to the
proposed modifications. Objections were heard. The impugned notification modifying
the aforesaid scheme had been issued by the State Government permitting operation

of services by permit-holders who had been granted permits to ply their vehicles on
inter-State routes, inter-District routes and intra-District routes and operating their
services after the publication of the modified schemes dated 10.1.1988 and 1.4.2000
and those permits operating on 1.4.2002 and whose routes were overlapping, the
notified routes of the Bellary approved scheme with a direction not to pick up or set
down passengers on any portion of the routes overlapping the notified routes except
at bus-stands.
5 . Similarly, Kollar Pocket Scheme was initially notified on 10.1.1968 and later on
modified on 10.1.1980. The impugned modified scheme was published on 7.11.2003.
Mysore, BTS, Kanakpura and Bangalore Schemes were initially notified on
17.11.1960, 16.1.1961, 24.12.1965 and 7.6.1980 respectively. The Mysore Scheme
was earlier modified on 21.11.1987. The impugned notification modifying Mysore,
Bangalore and BTS Schemes was issued on 31.5.2007. The impugned notification of
Bangalore and Kanakpura Plans had been issued on 11.11.2003, modifying the
scheme.
6 . As against the proposed modifications, detailed objections had been filed
contending that the State Transport Authorities have granted permits illegally time
and again on the notified routes. The permits were issued in a mala fide manner,
violation of law was committed repeatedly and such violations cannot be ratified by
the State Government as providing efficient services to the public has always been
the main objective of the State Transport Undertakings. The State Transport
Undertakings are on a better footing to provide efficient, adequate economical and
well-co-ordinated services to cater to the demand of travelling public as compared to
the private operators. Permits granted illegally cannot be saved by the Government
under the guise of modifying the scheme. There are number of private operators
whose permits have been rejected and they had been discriminated against while
others were granted illegal permits. They will also pray for grant of permits on the
notified routes. If the illegal permits are saved, it would lead to several
complications. Under Section 102 of the M.V. Act, any modification to an approved
scheme can only be made in public interest. The permits were not granted on the
representation of the public. It is at the instance of the private operators, an exercise
had been undertaken. The permit-holders are operating services on nationalised
routes causing heavy financial losses to the Corporation. The saving of illegal permits
will render the Scheme infructuous and its integrity will be diluted. The Corporation
is fully equipped to meet any additional demand from the travelling public. It has
taken utmost care to provide modern buses and to make its fleet environment friendly
by controlling the smoke emission level of its vehicles. It has also framed the scheme
of providing compensation to the passengers of the bus on behalf of the Corporation
because of unfortunate accidents. Modern bus stands have been constructed with
public amenities making huge investments and also issue free/concessional passes to
the blind, physically challenged, Police and Press reporters. The Corporation is fully
controlled by State and Central Government as such the proposed modification be
dropped.
7 . The State Government in the order dated 23.3.2003, passed with respect to
modification of Bellary Scheme, has observed that modifications had been
necessitated in view of the decision of this Court in Karnataka State Road Transport
Corporation v. Ashrafulla Khan and Ors. MANU/SC/0022/2002 : 2002 (2) SCC 560.
During the period 4.12.1995 and 14.1.2002 considering the interpretation with regard
to "overlapping", "intersection" and "corridor restriction" of the High Court of
Karnataka, the Transport Authorities had granted the permits to private operators in

accordance with the Act of 1988 and the Rules made thereunder considering the need
of the travelling public as these operators are meeting the genuine demand of the
travelling public in excess of services provided by the State Transport Undertakings.
So it has become necessary to save all the permits granted by the RTAs. which were
in operation as on 1.4.2002 with the condition that they shall not pick up or set down
the passengers except in the bus-stands.
8. With respect to the modification in Mysore, Bangalore, BTS and Kanakpura, order
dated 25.5.2007 had been passed in which it has been mentioned that it is to provide
exemption to the permits which are granted by the Transport Authorities and are
pending renewal as on 9.3.2007 in respect of the routes operating on inter-State,
inter-District and intra-District routes overlapping the road section of notified routes
modified as per the approved notification dated 9.3.2007, in the order, no reason -
good, bad or otherwise - has been given. While in the notification which has been
issued, it has been mentioned that it was considered necessary in public interest so
to do. Schemes of Mysore, Bangalore and BTS have been modified. In the notification
dated 11.11.2003 modifying the Bangalore and Kanakpura Schemes, it has been
mentioned that the Temple Committee had submitted a representation on which a
proposal had been initiated to modify the scheme and accordingly modification has
been made. On behalf of the State Government, it was stated before the High Court
that it was ready to pass fresh orders after considering various objections raised by
KSRTC.
9. The High Court of Karnataka by impugned orders has quashed the modifications so
made in the various Schemes. The High Court of Karnataka vide order dated
21.4.2011 has quashed the notification dated 31.5.2007 with respect to Mysore,
Bangalore and BTS Schemes. After looking into the original records, it was observed
that the Ministers held a cross-sitting held by the Corporation regarding notification
of the Shimoga Scheme and an order was passed on 17.4.2007 modifying the
Shimoga Scheme. There was no application of mind to the various objections filed by
the Corporation and without considering them, an order has been passed. The State
Government had been directed to consider the objections and pass a fresh order in
accordance with law within 3 months, providing an opportunity of hearing to the
Corporation and other private operators, the permit-holders holding valid permits as
on the date of the order and if they are authorised to run the vehicles otherwise for a
period of 3 months had been permitted to operate. Similar is the order passed with
respect to Bangalore and Kanakpura Schemes. Vide order dated 14.9.2011, the
notification dated 11.11.2003 with respect to Bangalore and Kanakpura Schemes has
also been quashed. Similarly, other modifications have also been quashed.
10. Mr. K.K. Venugopal, learned senior Counsel for the Appellants, has submitted
that reasons have been assigned by the State Government while modifying the
schemes. It was not necessary to cull out the reasons in detail. The exercise has been
undertaken in public interest. Thus, there was no reason to quash the modifications
made in the schemes.
11. Learned Counsel for the Appellants has placed reliance on the decision of this
Court in H.C. Narayanappa and Ors. v. The State of Mysore and Ors.
MANU/SC/0054/1960 : 1960 (3) SCR 742. Following paragraphs have been relied
upon:
Re. 3:

The plea that the Chief Minister who approved the scheme Under
Section 68D was biased has no substance. Section 68D of the Motor
Vehicles Act undoubtedly imposes a duty on the State Government to
act judicially in considering the objections and in approving or
modifying the scheme proposed by the transport undertaking.
Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport
Corporation and Anr. MANU/SC/0017/1958 : (1959) Supp. 1 S.C.R.
319. It is also true that the Government on whom the duty to decide
the dispute rests, is substantially a party to the dispute but if the
Government or the authority to whom the power is delegated acts
judicially in approving or modifying the scheme, the approval or
modification is not open to challenge on a presumption of bias. The
Minister or the officer of the Government who is invested with the
power to hear objections to the scheme is acting in his official
capacity and unless there is reliable evidence to show that he is
biased, his decision will not be liable to be called in question, merely
because he is a limb of the Government. The Chief Minister of the
State has filed an affidavit in this case stating that the contention of
the Petitioners that he was "biased in favour of the scheme was
baseless"; he has also stated that he heard such objections and
representations as were made before him and he had given the
fullest opportunity to the objectors to submit their objections
individually. The Chief Minister has given detailed reasons for
approving the scheme and has dealt with such of the objections as
he says were urged before him. In the last para. of the reasons
given, it is stated that the Government have heard all the arguments
advanced on behalf of the operators and "after giving full
consideration to them, the Government have come to the conclusion
that the scheme is necessary in the interest of the public and is
accordingly approved subject to the modifications that it shall come
into force on May 1, 1959". In the absence of any evidence
controverting these averments, the plea of bias must fail.
Re. 4:
The argument that the Chief Minister did not give "genuine
consideration" to the objections raised by operators to the scheme in
the light of the conditions prescribed has no force. The order of the
Chief Minister discusses the questions of law as well as questions of
fact. There is no specific reference in the order to certain objections
which were raised in the reply filed by the objectors, but we are, on
that account, unable to hold that the Chief Minister did not consider
those objections. The guarantee conferred by Section 68D of the
Motor Vehicles Act upon persons likely to be affected by the intended
scheme is a guarantee of an opportunity to put forth their objections
and to make representations to the State Government against the
acceptance of the scheme. This opportunity of making
representations and of being heard in support thereof may be
regarded as real only if in the consideration of the objections, there
is a judicial approach. But the Legislature does not contemplate an
appeal to this Court against the order passed by the State
Government approving or modifying the scheme. Provided the
authority invested with the power to consider the objections gives an

opportunity to the objectors to be heard in the matter and deals with
the objections in the light of the object intended to be secured by the
scheme, the ultimate order passed by that authority is not open to
challenge either on the ground that another view may possibly have
been taken on the objections or that detailed reasons have not been
given for upholding or rejecting the contentions raised by the
objectors.
1 2 . This Court observed that while dealing with these quasi-judicial matters like
modifying the scheme, the Act of 1939 imposed a duty on the State Government to
act judicially in considering the objections while approving or modifying the scheme.
The same is not open to question on the presumption of bias. It has been observed
that the Chief Minister had given detailed reasons for approving the scheme and had
dealt with such technical and legal objections filed before him. It has also been
observed that the ultimate order passed by the Authority is not open to challenge on
the ground that another view may possibly have been taken on the objections or that
detailed reasons have not been given. It is apparent that reasons have to be given,
factual and legal objections have to be dealt with.
13. Reliance has also been placed by the learned senior Counsel for the Appellants
on Capital Multi-purpose Cooperative Society Bhopal and Ors. v. The State of M.P.
and Ors. MANU/SC/0238/1967 : 1967 (3) SCR 329 wherein this Court dealt with the
mode of hearing of the objections and the question of adequate and real hearing. The
paragraph relied upon is reproduced hereunder:
The third contention raised on behalf of the Appellants is that the orders
approving and modifying the schemes in this case do not show that the
authority had applied its mind to the question whether the schemes were
such as to subserve the purposes of providing an efficient, adequate,
economical and properly co-ordinated transport service. Reliance in this
connection is placed on certain. American cases which hold that the lack of
an express finding necessary under a statute to validate an order of an
administrative agency cannot be supplied by implication. When therefore
such an administrative agency is required as a condition precedent to an
order to make a finding of facts the validity of the order must rest upon the
needed finding. If it is lacking the order is ineffective and the lack of express
finding cannot be supplied by implication. It is unnecessary for us to refer to
the American cases in detail; it is enough to say that the principles
enunciated above may be unexceptionable where the existence of a finding is
necessary for taking action, but that depends upon the words of the statute
and therefore we must now turn to the words of Section 68C and Section 68-
D. We have already indicated that the State Transport Undertaking publishes
a scheme when it has arrived at a certain opinion. After the scheme is
published Under Section 68C any person affected by it can object within 30
days Under Section 68D(1). Thereafter the State Government considers the
objections and gives an opportunity to the objector to be heard and also to
the State Transport Undertaking. Thereafter the State Government or the
authority authorised by it either approves or modifies the scheme or even
rejects it. There is no express provision in these two sections laying down
that the authority hearing objections must come to some finding of fact as a
condition precedent to its final order. As such no express finding as
envisaged in the American cases is necessary Under Section 68C read with
Section 68D that the scheme provides an efficient, adequate, economical and

properly co-ordinated road transport service. Besides we are of opinion that
the whole object of hearing objections Under Section 68D is to consider
whether the scheme provides an efficient, adequate, economical and properly
co-ordinated road transport service. After hearing objections the State
Government, or the officer authorised by it has either to approve or modify,
or if necessary to reject the scheme. Where the scheme is approved or
modified it necessarily follows in our opinion that it has been found to
provide an efficient, adequate, economical and properly co-ordinated
transport service; if it is not of that type, the State Government or the
authority appointed to hear objections would reject it. In the absence of a
provision requiring an express finding in these two sections it seems to us
that the very order of the State Government or the authority appointed by it
to hear objections must be held to mean either, where the scheme is
approved or modified, that it subserves the purposes mentioned in Section
68C, or, where it is rejected, that it does not subserve the purposes. Section
68D(2) does not require in our opinion any express finding, and even if there
is none in the present case, it would not invalidate the orders passed by the
authority hearing the objections. The argument on behalf of the Appellants
under this head is also rejected.
1 4 . It has also been observed that there is no power or authority in the State
Government to compel attendance of witness or to compel production of documents.
This Court has emphasised that no express finding is necessary Under Section 68C
read with Section 68D that the scheme provides efficient, adequate, economical and
properly co-ordinated road transport service as abovesaid is the purpose of the entire
exercise. If the scheme is modified, it follows that it has been to provide efficient,
adequate, economical and proper transport service. This Court has considered the
question whether Section 68D requires recording of any particular finding as
condition precedent to exercise the power conferred thereunder. The decision does
not dispense with the requirement to mention the reasons.
15. Reliance has also been placed by the operators on Gullapalli Nageswara Rao and
Ors. v. Andhra Pradesh State Road Transport Corporation and Anr.
MANU/SC/0017/1958 : AIR 1959 SC 308 in which it was laid down that an express
recital of the formation of the opinion that the scheme was necessary in public
interest, is not made a condition of the validity of the scheme. This Court has laid
down that the framing of scheme is manifestation of such opinion. This Court has laid
down thus:
14. The learned Counsel then contends that the scheme published does not
disclose that the State Transport Undertaking was of the opinion that the
scheme was necessary in the interests of the public and therefore, as the
necessary condition for the initiation of the scheme was not complied with,
the scheme could not be enforced. Section 68C says that where any State
Transport Undertaking is of opinion that for specified reasons it is necessary
in the public interest that road transport service should be run or operated by
the State Transport Undertaking, it may prepare a scheme giving particulars
of the scheme and publish it in the Official Gazette. An express recital of the
formation of the opinion by the Undertaking in the scheme is not made a
condition of the validity of the scheme. The scheme published in terms of the
section shall give particulars of the nature of the service proposed to be
rendered, the area or route proposed to be covered and such other
particulars respecting thereto. It is true that the preparation of the scheme is

made to depend upon the subjective opinion of the State Undertaking as
regards the necessity for such a scheme. The only question, therefore, is
whether the State Transport Undertaking formed the opinion before preparing
the scheme and causing it to be published in the Official Gazette. The scheme
published, as already noticed, was signed by Guru Pershad, General
Manager, State Transport Undertaking, Andhra Pradesh Road Transport. The
preamble to the scheme reads:
In exercise of the powers conferred by Section 68C of the Motor
Vehicles Act, 1939, it is hereby proposed, for the purpose of
providing an efficient, adequate, economical and properly co-
ordinated road transport service in public interest, to operate the
following transport services as per the particulars given below with
effect from a date to be notified by the Government.
We have already held that Guru Pershad represented the State Transport
Undertaking. The scheme was proposed by the said Undertaking in exercise
of the powers Under Section 68C of the Act for the purpose of providing an
efficient, adequate, economical and properly coordinated road transport
service in public interest. Except for the fact that the word 'opinion' is
omitted, the first part of the Section 68C is incorporated in the preamble of
the scheme; and, in addition, it also discloses that the scheme is proposed in
exercise of the powers conferred on the State Transport Undertaking Under
Section 68C of the Act. The State Transport Authority can frame a scheme
only if it is of opinion that it is necessary in public interest that the road
transport service should be run or operated by the Road Transport
Undertaking. When it proposes, for the reasons mentioned in the section, a
scheme providing for such a transport undertaking, it is a manifest
expression of its opinion in that regard. We gather from a reading of the
scheme that the State Transport Undertaking formed the necessary opinion
before preparing the scheme and publishing it. The argument of the learned
Counsel carries technicality to a breaking point and for the aforesaid reasons,
we reject it.
16. Sections 68C, 68D and 68E of the Act of 1939 which came up for consideration
are reproduced hereunder:
68-C. Preparation and publication of scheme of road transport service of a
State Transport Undertaking.- Where any State Transport Undertaking is of
opinion that for the purpose of providing an efficient, adequate, economical
and properly co-ordinated road transport service, it is necessary in the public
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
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.
68-D. Objection to the scheme - (1) On the publication of any scheme in the
Official Gazette and 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 any means
along or near the area or route proposed to be covered by the
scheme;
(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 jurisdiction
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.
68-E. 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 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 scheme:
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 respect of
the following matters, 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, if it considers necessary in the public interest
so to do, modify any scheme published Under Sub-section (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].

17. The pari materia provisions contained in Sections 99 and 102 of the Act of 1988
are reproduced hereunder:
99. Preparation and publication of proposal regarding road transport service
of a State transport undertaking.-[(1)] Where any State Government is of
opinion that for the purpose of providing an efficient, adequate, economical
and properly co-ordinated road transport service, it is necessary in the public
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 Government
may formulate a proposal regarding a scheme giving particulars of the nature
of the services proposed to be rendered, the area or route proposed to be
covered and other relevant particulars respecting thereto and shall publish
such proposal in the Official Gazette of the State formulating such proposal
and in not less than one newspaper in the regional language circulating in
the area or route proposed to be covered by such scheme and also in such
other manner as the State Government formulating such proposal deem fit.
[(2) Notwithstanding anything contained in Sub-section (1), when a proposal
is published under that Sub-section, then from the date of publication of
such proposal, no permit shall be granted to any person, except a temporary
permit during the pendency of the proposal and such temporary permit shall
be valid only for a period of one year from the date of its issue or till the
date of final publication of the scheme Under Section 100, whichever is
earlier.]
xxxxx
1 0 2 . Cancellation or modification of scheme.-(1) The State Government
may, at any time, if it considers necessary, in the public interest so to do,
modify any approved scheme 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.
(2) The State Government shall publish any modification proposed Under
Sub-section (1) in the Official Gazette and in one of the newspapers in the
regional languages circulating in the area in which it is proposed to be
covered by such modification, together with the date, not being less than
thirty days from such publication in the Official Gazette, and the time and
place at which any representation received in this behalf will be heard by the
State Government.
1 8 . It is apparent from the provisions that the scheme is framed for providing
efficient, adequate, economical and properly co-ordinated road transport service in
public interest. Section 102 of the Act of 1988 does not lay down the requirement of
recording any express finding on any particular aspect; whereas the duty is to hear
and consider the objections. It requires the State Government to act in public interest
to cancel or modify a scheme after giving the State Transport Undertaking or any
other affected person by the proposed modification an opportunity of hearing. The

State is supposed to be acting in public interest while exercising the power under the
provision. However, that does not dispense with the requirement to record reasons
while dealing with objections.
1 9 . Modification of the scheme is a quasi-judicial function while modifying or
cancelling a scheme. The State Government is duty-bound to consider the objections
and to give reasons either to accept or reject them. The rule of reason is anti-thesis
to arbitrariness in action and is a necessary concomitant of the principles of natural
justice.
2 0 . In Siemens Engineering & Manufacturing Co. of India Ltd. v. Union of India
MANU/SC/0211/1976 : 1976 (2) SCC 981, it was held:
6. x x x It is now settled law that where an authority makes an order in
exercise of a quasi-judicial function, it must record its reasons in support of
the order it makes. Every quasi-judicial order must be supported by reasons.
That has been laid down by a long line of decisions of this Court ending with
N.M. Desai v. Testeels Ltd. But, unfortunately, the Assistant Collector did not
choose to give any reasons in support of the order made by him confirming
the demand for differential duty. This was in plain disregard of the
requirement of law. The Collector in revision did give some sort of reason
but it was hardly satisfactory. He did not deal in his order with the arguments
advanced by the Appellants in their representation dated December 8, 1961
which were repeated in the subsequent representation dated June 4, 1965. It
is not suggested that the Collector should have made an elaborate order
discussing the arguments of the Appellants in the manner of a Court of law.
But the order of the Collector could have been a little more explicit and
articulate so as to lend assurance that the case of the Appellants had been
properly considered by him. If courts of law are to be replaced by
administrative authorities and tribunals, as indeed, in some kinds of cases,
with the proliferation of Administrative Law, they may have to be so
replaced, it is essential that administrative authorities and tribunals should
accord fair and proper hearing to the persons sought to be affected by their
orders and give sufficiently clear and explicit reasons in support of the orders
made by them. Then alone administrative authorities and tribunals exercising
quasi-judicial function will be able to justify their existence and carry
credibility with the people by inspiring confidence in the adjudicatory
process. The rule requiring reasons to be given in support of an order is, like
the principle of audi alteram partem, a basic principle of natural justice which
must inform every quasi-judicial process and this rule must be observed in
its proper spirit and mere pretence of compliance with it would not satisfy
the requirement of law. x x x.
2 1 . This Court in Rani Lakshmi Bai Kshetriya Gramin Bank's case (supra) while
relying upon S.N. Mukherjee v. Union of India MANU/SC/0346/1990 : 1990 (4) SCC
594 has laid down thus:
8. The purpose of disclosure of reasons, as held by a Constitution Bench of
this Court in S.N. Mukherjee v. Union of India (MANU/SC/0346/1990 : 1990
(4) SCC 594), is that people must have confidence in the judicial or quasi-
judicial authorities. Unless reasons are disclosed, how can a person know
whether the authority has applied its mind or not? Also, giving of reasons
minimises the chances of arbitrariness. Hence, it is an essential requirement

of the rule of law that some reasons, at least in brief, must be disclosed in a
judicial or quasi-judicial order, even if it is an order of affirmation.
22. A Constitution Bench of this Court has laid down in Krishna Swami v. Union of
India and Ors. MANU/SC/0222/1993 : 1992 (4) SCC 605 that if a statutory or public
authority/functionary does not record the reasons, its decision would be rendered
arbitrary, unfair, unjust and violating Articles 14 and 21 of the Constitution. This
Court has laid down thus:
Undoubtedly, in a parliamentary democracy governed by rule of law, any
action, decision or order of any statutory/public authority/functionary must
be founded upon reasons stated in the order or staring from the record.
Reasons are the links between the material, the foundation for their erection
and the actual conclusions. They would also demonstrate how the mind of
the maker was activated and actuated and their rational nexus and synthesis
with the facts considered and the conclusions reached. Lest it would be
arbitrary, unfair and unjust, violating Article 14 or unfair procedure offending
Article 21. But exceptions are envisaged keeping institutional pragmatism
into play, conscious as we are of each other's limitations.
23. In Workmen of Meenakshi Mills Ltd. and Ors. v. Meenakshi Mills Ltd. and Anr.
MANU/SC/0512/1992 : 1992 (3) SCC 336 while considering the principles of natural
justice, it has been observed that it is the duty to give reasons and to pass a
speaking order; that excludes arbitrariness in action as the same is necessary to
exclude arbitrariness. This Court has observed thus:
We have already dealt with the nature of the power that is exercised by the
appropriate Government or the authority while refusing or granting
permission Under Sub-section (2) and have found that the said power is not
purely administrative in character but partakes of exercise of a function
which is judicial in nature. The exercise of the said power envisages passing
of a speaking order on an objective consideration of relevant facts after
affording an opportunity to the concerned parties. Principles or guidelines are
insisted on with a view to control the exercise of discretion conferred by the
statute. There is need for such principles or guidelines when the
discretionary power is purely administrative in character to be exercised on
the subjective opinion of the authority. The same is, however, not true when
the power is required to be exercised on objective considerations by a
speaking order after affording the parties an opportunity to put forward their
respective points of view.
xxxxx
We are also unable to agree with the submission that the requirement of
passing a speaking order containing reasons as laid down in Sub-section (2)
of Section 25N does not provide sufficient safeguard against arbitrary action.
In S.N. Mukherjee v. Union of India MANU/SC/0346/1990 : 1990 (4) SCC
594, it has been held that irrespective of the fact whether the decision is
subject to appeal, revision or judicial review, the recording of reasons by an
administrative authority by itself serves a salutary purpose, viz., "it excludes
chances of arbitrariness and ensures a degree of fairness in the process of
decision-making.
2 4 . In Divisional Forest Officer, Kothagudem and Ors. v. Madhusudhan Rao

MANU/SC/0788/2008 : 2008 (3) SCC 469, this Court has laid down thus:
20. It is no doubt also true that an appellate or revisional authority is not
required to give detailed reasons for agreeing and confirming an order
passed by the lower forum but, in our view, in the interests of justice, the
delinquent officer is entitled to know at least the mind of the appellate or
revisional authority in dismissing his appeal and/or revision. It is true that no
detailed reasons are required to be given, but some brief reasons should be
indicated even in an order affirming the views of the lower forum.
25. In Chairman, Disciplinary Authority, Rani Lakshmi Bai Kshetriya Gramin Bank v.
Jagdish Sharan Varshney and Ors. MANU/SC/0468/2009 : 2009 (4) SCC 240, it was
observed that:
8. The purpose of disclosure of reasons, as held by a Constitution Bench of
this Court in S.N. Mukherjee v. Union of India (supra), is that people must
have confidence in the judicial or quasi-judicial authorities. Unless reasons
are disclosed, how can a person know whether the authority has applied its
mind or not? Also, giving of reasons minimises the chances of arbitrariness.
Hence, it is an essential requirement of the rule of law that some reasons, at
least in brief, must be disclosed in a judicial or quasi-judicial order, even if it
is an order of affirmation.
26. In Manohar v. State of Maharashtra and Anr. MANU/SC/1140/2012 : 2012 (13)
SCC 14 it has been laid down that in the context of State Information Commission, it
has to hear the parties, apply its mind and record the reasons as they are the basic
elements of natural justice. This Court has laid down thus:
17. The State Information Commission is performing adjudicatory functions
where two parties raise their respective issues to which the State Information
Commission is expected to apply its mind and pass an order directing
disclosure of the information asked for or declining the same. Either way, it
affects the rights of the parties who have raised rival contentions before the
Commission. If there were no rival contentions, the matter would rest at the
level of the designated Public Information Officer or immediately thereafter.
It comes to the State Information Commission only at the appellate stage
when rights and contentions require adjudication. The adjudicatory process
essentially has to be in consonance with the principles of natural justice,
including the doctrine of audi alteram partem. Hearing the parties,
application of mind and recording of reasoned decision are the basic
elements of natural justice. It is not expected of the Commission to breach
any of these principles, particularly when its orders are open to judicial
review. Much less to Tribunals or such Commissions, the courts have even
made compliance with the principle of rule of natural justice obligatory in the
class of administrative matters as well.
27. Now we come to the order passed in the instant case with respect to the Bellary
Scheme which is to the following effect:
The objections and representations received in this regard is examined and
the arguments advanced by the representatives of the STUs and private
operators for and against the modification proposed by the State Government
is considered in the light of the provisions of the Motor Vehicles Act, 1988.

Section 102 of the M.V. Act, 1988 empowers the State Government, at any
time, if it consider necessary in the public interest so to do, modify any
approved scheme.
Therefore, what is paramount for modifying the scheme is that it should be in
the public interest. The modification now proposed is necessitated in view of
the stand taken by the Hon'ble Supreme Court of India in Ashrafulla Khan's
case reported in MANU/SC/0022/2002 : AIR 2002 SC 629. During the period
from 04.12.1995 and 14.01.2002, considering the interpretation with regard
to the words "overlapping", "intersection" and "corridor restriction" of the
Hon'ble High Court of Karnataka, the Transport Authorities have granted the
permits to the private operators in accordance with the provisions of M.V.
Act, 1988 and rules made thereunder considering the need of the travelling
public, as these operators are meeting the genuine demands of the travelling
public in excess of the services provided by the STUs. Hence, it has become
necessary to save all the permits, granted by the RTAs which were in
operation as on 1.4.2002 in the interest of the travelling public.
Therefore, on the facts and averments made before me, I do not find the
sufficient grounds is established to support the objections and
representations received and made in person opposing the modification of
the approved Bellary and Raichur schemes published in Notification No.
HD/22/TMP/64 Dated 18.4.64 and TD/140/TMI/82, dated 03.11.1987. Hence,
the draft notification modifying the above schemes published in Notification
No. HTD/122/TMA97 dated 25.10.2002 is upheld and approved. All the
permits held as on 1.4.2002 are saved with the condition that they shall not
pick up of set down passengers except in the bus stands.
28. It is apparent that there is no consideration of the objections except mentioning
the arguments of the rival parties. Objections both factual and legal have not been
considered much less reasons assigned to overrule them. Even in brief, reasons have
not been assigned indicating how objections are disposed of.
29. Situation is worse in the orders modifying other schemes. Thus, modification of
the Schemes could not be said to be in accordance with the principles of natural
justice in the absence of reasons so as to reach the conclusion that private operators
are meeting the genuine demands of the public in excess of the service provided by
the STOs., hence, it cannot be said to be sustainable.
30. It was also urged on behalf of the Appellants that the permits were granted in the
light of the Full Bench decision of the High Court in the case of KSRTC v. Ashrafulla
which held the field at the relevant time. Thus, the permits had been validly granted
in accordance with the prevailing interpretation of "overlapping" and "inter-section".
31. On behalf of the Appellants, reliance has been placed on a decision of this Court
in Naresh Shridhar Mirajkar and Ors. v. State of Maharashtra and Anr.
MANU/SC/0044/1966 : 1966 (3) SCR 744 to contend that the decision of the High
Court is binding upon subordinate courts, tribunals etc. Reliance has been placed on
the following passage:
60. There is yet another aspect of this matter to which it is necessary to
refer. The High Court is a superior Court of Record and Under Article 215,
shall have all powers of such a Court of Record including the power to punish
contempt of itself. One distinguishing characteristic of such superior courts is

that they are entitled to consider questions of their jurisdiction raised before
them. This question fell to be considered by this Court in Special Reference
No. 1 of 1964 (1965) 1 S.C.R. 413. In that case, it was urged before this
Court that in granting bail to Keshav Singh, the High Court had exceeded its
jurisdiction and as such, the order was a nullity. Rejecting this argument,
this Court observed that in the case of a superior Court of Record, it is for
the court to consider whether any matter falls within its jurisdiction or not.
Unlike a court of limited jurisdiction, the superior court is entitled to
determine for itself questions about its own jurisdiction. That is why this
Court did not accede to the proposition that in passing the order for interim
bail, the High Court can be said to have exceeded its jurisdiction with the
result that the order in question was null and void. In support of this view,
this Court cited a passage from Halsbury's Laws of England where it is
observed that prima facie, no matter is deemed to be beyond the jurisdiction
of a superior court unless it is expressly shown to be so, while nothing is
within the jurisdiction of an inferior court unless it is expressly shown on the
face of the proceedings that the particular matter is within the cognizance of
the particular Court." (Halsbury's Laws of England, Vol. 9, p. 349). If the
decision of a superior Court on a question of its jurisdiction is erroneous, it
can, of course, be corrected by appeal or revision as may be permissible
under the law; but until the adjudication by a superior Court on such a point
is set aside by adopting the appropriate course, it would not be open to be
corrected by the exercise of the writ jurisdiction of this Court.
32. Reliance was also placed on Commissioner of Income Tax, Bhopal v. G.M. Mittal
Stainless Steel (P) Ltd. MANU/SC/1321/2002 : 2003 (11) SCC 441 in which this
Court considered the question that the decision of the High Court will bind the
authority under the Central Act within the State where the decision has been
rendered. The fact that the decision of another High Court is pending disposal before
the Supreme Court, was irrelevant and the decision of the jurisdictional High Court
was binding upon the authority within the State.
33. The decision in Ashrafulla was reversed by this Court in Karnataka State Road
Transport Corporation v. Ashrafulla Khan and Ors. MANU/SC/0022/2002 : 2002 (2)
SCC 560 in which this Court had laid down that a permit cannot be granted for a non-
notified route which overlaps or traverses the same line of travel as a portion of
notified route. Exception can only be made in case where non-notified route cuts
across or intersects a notified route. It is not of significance whether the area of
overlapping is a small area or a larger area or whether it falls within the local limits
of a town or a village. The decision of Full Bench of the High Court of Karnataka
holding that small portions falling within the limits of a town or a village on a
notified route are to be treated as only an intersection of the notified route and not as
overlapping, had been reversed. In Ashrafulla (supra), this Court has laid down that
on the representation of the travelling public, the State Undertaking, as the case may
be, the State Government has to consider the matter of modification of the Scheme.
In case the State Undertaking lacks vehicles or other infrastructure to provide an
efficient and well-co-ordinated transport service to travelling public, it may modify
the Scheme. This Court has laid down thus:
9. Since there was a conflict between the two sets of decisions rendered by
this Court in Ram Sanehi Singh v. Bihar SRTC, Mysore SRTC v. Mysore State
Transport Appellate Tribunal and Mysore SRTC v. Mysore Revenue Appellate
Tribunal the matter was referred to a Constitution Bench of this Court. A

Constitution Bench of this Court in Adarsh Travels Bus Service v. State of
U.P. distinguished the decision in Ram Sanehi Singh v. Bihar SRTC for having
been decided on particular facts of its case but did not approve it. However,
the decision in Mysore SRTC v. Mysore Revenue Appellate Tribunal was
expressly not approved, whereas the decision in Mysore SRTC v. Mysore
State Transport Appellate Tribunal was approved. The Constitution Bench
settled the law by laying down that once a Scheme is for total exclusion
prohibiting private operators from plying stage carriages on a whole or part
of a notified route, no permit can be granted on the notified route or portion
thereof.
xxxxx
29. Before we part with the case, we would like to observe that the need and
convenience of the travelling public is of paramount consideration under the
Act. A situation may arise when the Transport Undertaking may be found not
catering to the needs of the travelling public. In such a case may be, may
consider the matter and provide adequate transport services if it is required.
In case the Government finds that the Undertaking lacks vehicles or other
infrastructure to provide an efficient and well-coordinated transport services
to the travelling public, it may modify the Scheme as to permit private
operators to ply vehicles on such route or routes. In any case it is always
permissible to the legislature to amend law by providing private operators to
run an efficient and well-coordinated transport services on such route or
routes on payment of adequate royalty to the State Government.
34. It has also been laid down by this Court in Ashrafulla that its decision in Adarsh
Travels Bus Service and Anr. v. State of U.P. and Ors. MANU/SC/0243/1985 : 1985
(4) SCC 557 taking the same view as to overlapping still holds the field. It prevailed
as per the mandate of Article 141 of the Constitution of India. In Adarsh Travels
(supra), this Court has laid down thus:
7. A careful and diligent perusal of Section 68C, Section 68D(3) and Section
68FF in the light of the definition of the expression "route" in Section 2(28A)
appears to make it manifestly clear that once a scheme is published Under
Section 68D 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
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. We are
not impressed by the various submissions made on behalf of the Appellants
by their several counsel. The foremost argument was that based on the great
inconvenience which may be caused to the travelling public if a passenger is
not allowed to travel, say, straight from A to B on a stage carriage, to ply
which on the route A to B a person X has a permit, merely because a part of
the route from C to D somewhere between the points A and B is part of a
notified route. The answer to the question is that this is a factor which will
necessarily be taken into consideration by the State Transport Undertaking
before publishing the scheme Under Section 68C, by the Government Under

Section 68D when considering the objections to the scheme and thereafter
either by the State Transport Undertaking or by the Government when the
inconveniences experienced by the travelling public are brought to their
notice. The question 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 well nigh impossible to keep a proper check at every
point of the route. It is also well known that oftentimes 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.
35. Reliance was placed on behalf of the Respondents on a decision of this Court in
A.P. State Road Transport Corporation v. P.V. Ramamohan Chowdhary
MANU/SC/0167/1992 : 1992 (2) SCC 235 in which it has been laid down that the
power of cancellation or modification Under Section 68E would be de hors the permit
granted Under Section 68D of the Act of 1939. The conditions precedent therein are
that the Government must objectively come to a finding and the Government should
follow the procedure prescribed in the statute. It would be either on the initiative of
the State Transport Undertaking or on an application or representation by the general
public of the necessity in public interest to modify the scheme approved Under
Section 68D(2). It is not at the behest of the erstwhile holders of permits. It was also
laid down that even on partial overlapping of approved scheme, private operators
have been totally prohibited to have corridor shelters and could no longer enter into
the frozen area, route or part thereof.
36. The view of the High Court in Ashrafulla (supra) has been reversed by this Court.
The decision is of retrospective operation, as it has not been laid down that it would
operate prospectively; more so, in the case of reversal of the judgment. This Court in
P.V. George and Ors. v. State of Kerala and Ors. MANU/SC/0669/2007 : 2007 (3)
SCC 557 held that the law declared by a court will have a retrospective effect if not
declared so specifically. Referring to Golak Nath v. State of Punjab
MANU/SC/0029/1967 : AIR 1967 SC 1643 it had also been observed that the power
of prospective overruling is vested only in the Supreme Court and that too in
constitutional matters. It was observed:
19. It may be true that when the doctrine of stare decisis is not adhered to, a
change in the law may adversely affect the interest of the citizens. The
doctrine of prospective overruling although is applied to overcome such a
situation, but then it must be stated expressly. The power must be exercised
in the clearest possible term. The decisions of this Court are clear pointer
thereto.
xxxxx

2 9 . Moreover, the judgment of the Full Bench has attained finality. The
special leave petition has been dismissed. The subsequent Division Bench,
therefore, could not have said as to whether the law declared by the Full
Bench would have a prospective operation or not. The law declared by a
court will have a retrospective effect if not otherwise stated to be so
specifically. The Full Bench having not said so, the subsequent Division
Bench did not have the jurisdiction in that behalf.
37. In Ravi S. Naik v. Union of India and Ors. MANU/SC/0366/1994 : 1994 Supp (2)
SCC 641, it has been laid down that there is retrospective operation of the decision of
this Court. The interpretation of the provision becomes effective from the date of
enactment of the provision. In M.A. Murthy v. State of Karnataka and Ors.
MANU/SC/0662/2003 : 2003 (7) SCC 517, it was held that the law declared by the
Supreme Court is normally assumed to be the law from inception. Prospective
operation is only exception to this normal rule. It was held thus:
8. The learned Counsel for the Appellant submitted that the approach of the
High Court is erroneous as the law declared by this Court is presumed to be
the law at all times. Normally, the decision of this Court enunciating a
principle of law is applicable to all cases irrespective of its stage of pendency
because it is assumed that what is enunciated by the Supreme Court is, in
fact, the law from inception. The doctrine of prospective overruling which is
a feature of American jurisprudence is an exception to the normal principle of
law, was imported and applied for the first time in L.C. Golak Nath v. State of
Punjab MANU/SC/0029/1967 : AIR 1967 SC 1643. In Managing Director,
ECIL v. B. Karunakar MANU/SC/0237/1994 : 1993 (4) SCC 727, the view was
adopted. Prospective overruling is a part of the principles of constitutional
canon of interpretation and can be resorted to by this Court while
superseding the law declared by it earlier. It is a device innovated to avoid
reopening of settled issues, to prevent multiplicity of proceedings, and to
avoid uncertainty and avoidable litigation. In other words, actions taken
contrary to the law declared prior to the date of declaration are validated in
larger public interest. The law as declared applies to future cases. (See
Ashok Kumar Gupta v. State of U.P. MANU/SC/1176/1997 : 1997 (5) SCC
201 and Baburam v. C.C. Jacob MANU/SC/0175/1999 : 1999 (3) SCC 362). It
is for this Court to indicate as to whether the decision in question will
operate prospectively. In other words, there shall be no prospective
overruling, unless it is so indicated in the particular decision. It is not open
to be held that the decision in a particular case will be prospective in its
application by application of the doctrine of prospective overruling. The
doctrine of binding precedent helps in promoting certainty and consistency in
judicial decisions and enables an organic development of the law besides
providing assurance to the individual as to the consequences of transactions
forming part of the daily affairs. That being the position, the High Court was
in error by holding that the judgment which operated on the date of selection
was operative and not the review judgment in Ashok Kumar Sharma case No.
II MANU/SC/1130/1997 : 1997 (4) SCC 18. All the more so when the
subsequent judgment is by way of review of the first judgment in which case
there are no judgments at all and the subsequent judgment rendered on
review petitions is the one and only judgment rendered, effectively and for
all purposes, the earlier decision having been erased by countenancing the
review applications. The impugned judgments of the High Court are,
therefore, set aside.

38. It was also submitted on behalf of one of the operators that as some of the
permits granted were illegally cancelled, fixation of the cut off date and validating the
permits held on the cut off dates would be discriminatory as that would create
monopoly in favour of the incumbent private operators who were operating their
vehicles on the cut off date.
39. It was submitted on behalf of KSRTC that it was at the behest of the private
operators that the exercise of modification had been undertaken by the State
Government.
40. We refrain to dilate upon the various aforesaid aspects as these were required to
be considered by the State Government when such objections had been taken before
it by KSRTC. It was necessary to consider, inter alia, the objections raised by the
KSRTC as to the necessity of modification, legality of the permits which were granted
and the plea of discrimination so raised by other operators including the observation
made above by this Court in KSRTC v. Ashrafulla Khan (supra).
41. Resultantly, the appeals being bereft of merits are hereby dismissed. Let State
Government hear the objections, consider and decide the same in accordance with
law by a reasoned order within 3 months. In the intervening period, the arrangement
as directed by the High Court in the impugned order to continue.
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MANU/SC/1199/2014

IN THE SUPREME COURT OF INDIA

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