Supreme Court Bars Private Buses on State-Reserved Inter-State Routes Between MP and UP

In a significant judgment, the Supreme Court of India has clarified the hierarchy of regulations governing inter-State bus transport. The Court ruled that private bus operators cannot obtain permits to ply on routes between Madhya Pradesh and Uttar Pradesh that overlap with routes already designated for the Uttar Pradesh State Road Transport Corporation (UPSRTC). The Bench, comprising Justices Dipankar Datta and AG Masih, emphasized that reciprocal transport agreements made under Section 88 of the Motor Vehicles Act, 1988, are subordinate to approved transport schemes formulated under Chapter VI of the Act. This means that state-owned transport corporations' notified routes take precedence.

The Supreme Court overturned multiple orders from the Madhya Pradesh High Court, which had directed Uttar Pradesh transport authorities to approve permits issued to private operators by Madhya Pradesh. The case originated from a 2006 agreement between the two states. After the Madhya Pradesh State Road Transport Corporation (MPSRTC) was wound up, private operators sought to use routes previously reserved for the state entity, but the Uttar Pradesh authorities refused to grant the necessary countersignatures.

While upholding the legal restrictions, the Court acknowledged the potential impact on passenger convenience and directed the Principal Secretaries of the Transport Departments of both Madhya Pradesh and Uttar Pradesh to meet and explore administrative solutions within three months. This dialogue aims to resolve the issue to facilitate passenger convenience without compromising the statutory bar on private operations on notified state routes. The Court suggested that if the MPSRTC is indeed wound up, both states might reconsider modifying their agreement to allow private operators on those routes.

Impact This ruling reinforces the primacy of state transport corporations' designated routes over private operator permits when there is an overlap, especially concerning routes notified under Chapter VI of the Motor Vehicles Act. It provides regulatory clarity for state transport undertakings and sets a precedent for similar disputes. However, the directive for administrative solutions suggests a balancing act between statutory rights and public convenience, which could lead to policy changes or agreements between states. The direct market impact on listed entities might be moderate, but it shapes the regulatory landscape for the passenger transport sector in India.

Difficult Terms Reciprocal transport agreements: Agreements between two states that allow transport operators from one state to operate services in the other state. Inter-State routes: Routes for public transport services that connect two or more different states. Notified routes: Specific routes that have been officially declared and designated by transport authorities for operation by certain entities. Uttar Pradesh State Road Transport Corporation (UPSRTC): The government-owned public transport bus service provider for Uttar Pradesh. Madhya Pradesh State Road Transport Corporation (MPSRTC): The former government-owned public transport bus service provider for Madhya Pradesh. Motor Vehicles Act, 1988: The primary legislation in India governing road transport, vehicle standards, traffic rules, and licensing. Chapter VI of the Act: This chapter of the Motor Vehicles Act deals with the regulation and nationalization of road transport services. Chapter V of the Act: This chapter of the Motor Vehicles Act covers the licensing of transport vehicles. Countersign permits: The act of endorsing or validating a permit that has already been issued by an authority in another jurisdiction or state. State Transport Authority (STA): A governmental body responsible for regulating and managing road transport services within a particular state. Public interest litigation (PIL): A lawsuit filed in court to protect the public interest, often concerning matters of great public importance. Writ petitions: Formal written orders issued by a court commanding or preventing a specific action. Administrative solutions: Resolutions to issues achieved through discussions, cooperation, and policy adjustments between government departments or states, rather than solely through legal rulings.