Judgment

HEGDE, J.:- The appellant is a transport operator. He applied for and obtained a permit from the R.T.A., Chitradurga for the inter-state route from Chitradurga in Mysore State to Srisaila in Andhra Pradesh, on January 18, 1964. Even before this permit was issued to him, the Government of Mysore had notified a draft scheme under S. 68 (C) of the Motor Vehicles Act, 1939 (to be hereinafter referred to as the Act) providing for the operation of the trunk routes by the State Transport Undertaking in the Bellary District. M.S.R.T.C., a State Transport Undertaking and other rival claimants objected to the issue of the permit in question to the appellant but their objections were overruled by the R.T.A. Chitradurga. Aggrieved by that order M.S.R.T.C. and other rival claimants took up the matter in appeal to the Mysore State Transport Appellate Tribunal. Meanwhile on April 18, 1964, the Government issued a notification under S. 68D (3) of the Act approving the draft scheme earlier issued by it. That scheme is known as "Bellary Scheme". One of the clauses in the scheme provides:

"The State Transport Undertaking will operate services on all the routes to the complete exclusion of other persons except in regard to the portions of the inter-district routes lying outside the Bellary District. The existing permit holders on inter-state routes, may continue to operate such inter-state routes subject to the condition that their permits shall be rendered ineffective by the competent authority for the overlapping portion in the District of Bellary."

2. This scheme was published in the official gazette on May 7, 1964. Thereafter M.S.R.T.C. applied for permits under S. 68F on July 28, 1964 for the routes nationalised under the "Bellary Scheme". Till then the appellant had not obtained the counter-signature of the concerned R.T.A in Andhra Pradesh as required by S. 63 (1) of the Act for the inter-state permit issued to him. The appeal filed by M.S.R.T.C. was dismissed by the Mysore State Transport Appellate Tribunal on November 2, 1964. As against that order M.S.R.T.C. went up in appeal to the Mysore Revenue Appellate Tribunal on December 9, 1964. During the pendency of that appeal, the appellant obtained counter-signatures of the concerned R.T.A. in Andhra Pradesh on June 23, 1965 for his inter-state permit. In June, 1967, the R.T.A. Chitradurga renewed the permit granted to the appellant on January 18, 1964. That renewed permit was duly counter-signed by the concerned R.T.A. in Andhra Pradesh. On July 30, 1970, the Mysore Revenue Appellate Tribunal allowed the appeal filed by the M.S.R.T.C. and set aside the grant in favour of the appellant on the ground that the appellant not being an "existing permit holder" as contemplated by the scheme is not entitled to operate in the route in question. The appellant challenged that decision before the Mysore High Court by means of a writ petition under Art. 226 of the Constitution. The petition was dismissed by the Mysore High Court on August 10, 1971. Thereafter this appeal was brought after obtaining special leave from this Court.

3. Mr. A. K. Sen, appearing for the appellant challenged the correctness of the decision of the High Court on various grounds. He contended that the "Bellary scheme" was implemented only on July 1, 1965 when the permit asked for by the M.S.R.T.C. was granted. But before that permit had been granted, the appellant s permit had been counter-signed by the concerned R.T.A. in Andhra Pradesh. Hence he must be held to be an "existing permit holder on inter-state route" as contemplated in the clause quoted above. According to him a scheme noticed under S. 68D (3) of the Act cannot be considered to have became effective until the R.T.A passes appropriate orders under S. 68F (2). His next contention was that under the "Bellary scheme", there was only a partial exclusion and not total exclusion. Therefore all that the R.T.A could have done under S. 68F (2) was to make his permit fr