Supreme Court: In a civil appeal filed against the judgment and order of the Madhya Pradesh High Court , as well as in a writ petition filed under Article 32 of the Constitution seeking enforcement of the rights guaranteed under Article 19(1)(g) f the Constitution, the Court was concerned with the grant of permits on certain inter-State routes that overlapped portions of certain intra-State notified routes. Accordingly, Chapter V of the Motor Vehicles Act, 1988, titled Control of Transport Vehicles, and Chapter VI, titled Special Provisions Relating to State Transport Undertakings, along with the relevant forms, constituted the focal point of the Court’s consideration.
The Division Bench of Dipankar Datta* and A.G. Masih, JJ. emphasised that, given India’s substantial progress in the road transport sector, the interests of passengers and commuters must remain of paramount concern for transport authorities, in this case, for both the States of Uttar Pradesh and Madhya Pradesh. Consequently, the Court held that no permission could be granted at this stage to any private operator holding a permit issued by the State Transport Authority (STA), MP, to operate a stage carriage on an inter-State route overlapping a notified intra-State route in Uttar Pradesh.
Thus, the Court gave the following directions and orders:
i. The judgment and order of the High Court was set aside.
ii. The other judgments and orders challenged in the connected civil appeals were also set aside.
iii. The Writ Petition was dismissed.
iv. The States of Madhya Pradesh and Uttar Pradesh were permitted to proceed in accordance with the observations and directions in the judgment.
The principal question that arose for consideration before the Court was whether a stage carriage permit could be granted to a private operator on an inter-State route in terms of an Inter-State Route (IS-RT) Agreement executed between two neighbouring States under Section 88 of the Motor Vehicles Act, 1988, when a portion of such inter-State route overlapped with an intra-State route that had been notified under a scheme approved in accordance with the provisions of Chapter VI of the 1988 Act.
The Court noted that it would be appropriate to refer to the provisions of the Motor Vehicles Act, 1988 which had a material bearing on the question arising for determination in the present matters. Chapter V of the 1988 Act contained Section 88, while Chapter VI dealt with special provisions relating to State Transport Undertakings. The Court further observed that the law relating to Inter-State Route (IS-RT) Agreements was contained in sub-sections (5) and (6) of Section 88 of the 1988 Act. Chapter VI comprises of 9 (nine) sections of which the first 6 (six) are required to be read to resolve the controversy under consideration.
The Court noted that there were multiple decisions of the Supreme Court declaring that private operators could be completely excluded from plying their stage carriages on notified routes or any part thereof. However, the Court observed that there were at least five or six decisions which had a direct bearing on the question arising for determination in the present matters.
As the discussion unfolded, the Court pointed out that there existed a decision of a coordinate Bench that supported the contentions raised by the permit holders. This coordinate Bench decision, however, was contrary to the law laid down in two or three earlier three-Judge Bench decisions. Subsequently, a larger Bench did not agree with the view taken by the coordinate Bench, and that larger Bench decision was later approved by a Constitution Bench.
The sixth decision, also rendered by a coordinate Bench, followed the rulings of the larger Bench and the Constitution Bench, being bound by judicial discipline. Consequently, the Court held that the issue before it was no longer res integra, in light of the authoritative pronouncements by the larger and Constitution Benches of the Supreme Court, which were equally binding on the present Bench.
The Court observed that it had extensively referred to the statutory provisions of the Motor Vehicles Act, 1988, particularly Section 88, to emphasise the procedure for publishing a draft Inter-State Route (IS-RT) Agreement in the Official Gazette, inviting objections, and finalising the agreement only after due consideration of such objections. Since the IS-RT Agreement had been brought into effect with the concurrence of both States — Madhya Pradesh and Uttar Pradesh , it was presumed that any objections, if lodged, had been duly considered.
The Court further noted that the IS-RT Agreement contained a clause stipulating that, in the event of the Madhya Pradesh State Road Transport Corporation (MPSRTC) being wound up, the routes earmarked for it in Annexure B would be shifted to Annexure A, thereby enabling private operators to apply for and obtain permits to ply their stage carriages on such routes. Whether or not the Uttar Pradesh State Road Transport Corporation (UPSRTC) had raised any objections or if such objections were not considered was held to be of little consequence. The Court reasoned that the UPSRTC could be deemed to have accepted that, should MPSRTC be unable to operate its stage carriages on the routes listed in Annexure B, those routes would automatically be included in Annexure A, allowing private operators to seek permits lawfully.
Based on the materials on record, the private operators contended that the MPSRTC had been wound up. However, the Court found no conclusive evidence to support that assertion; the available material only indicated that the process of winding up was underway.
In light of the binding precedents governing the issue and the settled legal position, the Court concluded that granting relief to the private operators was virtually impossible, unless it was clearly established that the MPSRTC had indeed been wound up.
The Court further observed that, in addition to the absence of clear evidence regarding the winding up of MPSRTC, another major impediment to granting relief in favour of the private operators was the statutory mandate of Chapter VI overriding Chapter V of the Motor Vehicles Act, 1988.
The Court explained that an Inter-State Route (IS-RT) Agreement could be executed between two States by virtue of Section 88, which falls under Chapter V of the Act. However, as consistently held in previous judgments, such an IS-RT Agreement, by its very nature, constituted an arrangement between two States, and not a law under the Motor Vehicles Act. Consequently, approved schemes and notified routes envisaged under Chapter VI would override Section 88, owing to the express provision contained in Section 98 of the Act.
The Court noted that since the decision in Mysore SRTC v. Mysore Revenue Appellate Tribunal (‘MSRTC—I’), (1975) 4 SCC 192, was no longer good law, it could not come to the aid of the private operators. Nonetheless, the Court acknowledged that, in principle, it would have been logical and prudent for the States, while executing an IS-RT Agreement, to expressly exclude private operators from operating stage carriages on inter-State routes that overlap notified intra-State routes, by including the necessary clauses in the agreement itself. Given that such agreements could only come into existence through consensus between neighbouring States, the Court observed that it was presumed that all relevant considerations , particularly public interest , were taken into account during their formulation.
However, the Court lamented that the States of Uttar Pradesh and Madhya Pradesh appeared to have shown a lack of application of mind and purpose, resulting in the dilution of public interest. Their failure to recognize that certain inter-State routes overlapped notified intra-State routes in favour of the UPSRTC had, according to the Court, frustrated the very object and purpose of the IS-RT Agreement. The Court expressed disappointment that both States, along with UPSRTC, had failed to adequately protect the interests of passengers and commuters.
While proposing to allow the civil appeals and dismiss the writ petition, the Court clarified that it would not remain a mute spectator and intended to make certain parting observations and directions in the larger interest of the public.
The Court then reflected on the evolution of road transport in India, highlighting the remarkable transformation the sector had undergone. It noted that substantial progress had been achieved in infrastructure development, leading to an extensive network of highways and expressways that ensured last-mile connectivity, reduced travel time, and enhanced mobility. The Court commended the smoother surfaces of highways, the introduction of modern and electric vehicles, and the growing emphasis on sustainable and technology-integrated transportation, observing that these developments had significantly improved efficiency, accessibility, and passenger comfort.
In conclusion, the Court recognised that India’s road transport sector had evolved into a system marked by innovation, sustainability, and enhanced public service, driven by continuous investment and modernization.
The Court highlighted that data presently available on the websites of several State Road Transport Corporations (SRTCs) indicated that some of these corporations were thriving, showing impressive growth and adoption of modern technology. The Court remarked that digitalisation had been a game changer in the sector, enabling these corporations to leverage technology to enhance operational efficiency, improve customer experience, and adapt to the evolving transportation landscape.
The Court noted that online booking platforms and live tracking through mobile applications had made travel more convenient, while efforts were underway to expand services and streamline operations. It further observed that although some routes were still being serviced by older buses nearing phase-out, many SRTCs had introduced modern vehicles such as electric buses (e-buses), reflecting a conscious move toward sustainability and modernization.
The Court emphasised that, given India’s substantial progress in the road transport sector, the interests of passengers and commuters must remain of paramount concern for transport authorities, in this case, for both the States of Uttar Pradesh and Madhya Pradesh. Consequently, the Court held that no permission could be granted at this stage to any private operator holding a permit issued by the State Transport Authority (STA), MP, to operate a stage carriage on an inter-State route overlapping a notified intra-State route in Uttar Pradesh.
However, the Court expressed the view that much could still be achieved through constructive dialogue between the two States. Referring to the parting observations in Adarsh Travels Bus Services v. State of Uttar Pradesh, (1985) 4 SCC 557, the Court underscored that stage carriage services are provided for the benefit of a wide cross-section of the population, and any inconvenience to passengers would amount to a disservice by the States of MP and UP.
The Court acknowledged that since the STA, MP had issued permits to private operators on routes earlier reserved for MPSRTC. It was reasonable to infer that MPSRTC was no longer plying its vehicles on those routes. Nonetheless, as per the terms of the IS-RT Agreement, private operators could only claim permits if MPSRTC had been wound up. Although this had not been conclusively established, the Court held that an opportunity should be given to demonstrate it. If proven, the IS-RT Agreement should be worked out with necessary modifications, as the agreement itself allowed such changes.
To facilitate this process, the Court directed that the Principal Secretaries of the Transport Departments of MP and UP, along with other responsible officers, convene a meeting within three months at a mutually convenient venue to discuss the modalities for implementing and updating the IS-RT Agreement. If the MP transport authorities could satisfy their UP counterparts that MPSRTC had been wound up or was on the verge of winding up, and thus unable to ply its vehicles on the routes listed in Annexure B, the States could take an appropriate decision to include those routes in Annexure A and permit private operators to operate stage carriages thereon. Such measures, however, were to be taken only upon mutual consensus.
The Court also suggested that both States should consider whether partial exclusion of inter-State routes from approved schemes under Section 99 of the 1988 MV Act could be allowed to better serve passenger and commuter interests.
Finally, the Court directed that, if consensus was reached, the States should act without delay in granting and countersigning the necessary permits. In the absence of consensus, the State of MP would be free to decide its future course of action, keeping in mind that an IS-RT Agreement cannot be revoked unilaterally.
The Court concluded by reiterating that such matters of transport policy are best left to the discretion of the two States and accordingly reserved the issue for their consideration.
[U.P. State Road Transport Corporation Through its Chief General Manager v Kashmiri Lal Batra, Civil Appeal No. 10522 of 2025, decided on 04-11-2025]
*Judgment Authored by: Justice Dipankar Datta
Advocates who appeared in this case:
For Appellant(s): Ms. Shobha Gupta, Sr. Adv. Mr. Ankit Anandraj Shah, AOR Mr. Arpit Bamal, Adv. Mr. Vaibhav Pareek, Adv. Mr. Tarun Arora, Adv. Mr. Gitesh Marwah, Adv. Mr. Shyamal Kumar, AOR Mr. Nishit Agrawal, AOR Ms. Kanishka Mittal, Adv. Mr. Shrey Kapoor, Adv. Mrs. Upasna Agrawal, Adv. Ms. Upasna Agrawal, Adv. Ms. Deepti Rathi, Adv. Mr. Shadab Khan, Adv.
For Respondent(s): Ms. Shobha Gupta, Sr. Adv. Mr. Ankit Anandraj Shah, AOR Mr. Gitesh Marwah, Adv. Mr. Tarun Arora, Adv. Mr. Vaibhav Pareek, Adv. Mrs. Rani Chhabra, AOR Mr. Deepkaran Dalal, AOR Mr. Milind Kumar, AOR Mr. Sarthak Raizada Ga, Adv. Mr. Sarad Kumar Singhania, AOR Ms. Rashmi Singhania, Adv. Mr. Yashraj Singh Bundela , AOR Mr. Pradeep Misra, AOR Mr. Manoj Kumar Mishra, Adv. Mr. Daleep Dhyani, Adv. Mr. Suraj Singh, Adv. Ms. Sansriti Pathak, A.A.G. Ms. Shagufa Khan, Adv. Mr. Aman Prasad, Adv. Ms. Nidhi Jaswal, AOR Mr. Nikhil Goel, Sr. Adv. Mr. Girish Malviya, Adv. 3 Mr. Rohit Amit Sthalekar, AOR Mr. Grish Malviya, Adv. Mr. Ridhi Jain, Adv. Mr. Prithvi Pal, AOR Mr. Nishit Agrawal, AOR Ms. Kanishka Mittal, Adv. Mr. Shrey Kapoor, Adv. Ms. Upasna Agrawal, Adv. Ms. Deepti Rathi, Adv. Mr. Shadab Khan, Adv. Mr. Abhay Singh, AOR Mrs. Ankita Agarwal, Adv. Mr. Nikhil Goel, Sr. Adv. Mr. Girish Malviya, Adv. Mr. Rohit Amit Sthalekar, AOR Mr. Grish Malviya, Adv. Mr. Ridhi Jain, Adv.
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