JUDGMENT

CHINNAPPA REDDY, J. :— The Path of nationalisation of Motor Bus transport can hardly be said to have been smooth in the State of Uttar Pradesh, The cases now before us illustrate this point. To take an example, the route Lucknow to Kanpur was notified under the Uttar Pradesh State Road Transport Act of 1931. The effect of the Notification was to totally exclude private operators from plying their State Carriages on the whole or any part of the route, Lucknow to Kanpur. But the Uttar Pradesh Act No. 2 of 1951 and the Notification were struck down by this Court in Saghir Ahmed v. State of U. P. AIR 1954 SC 728. However, the Uttar Pradesh Legislature enacted Uttar Pradesh Act No. 9 of 1955, by Sections 19 and 20 of which the Notifications issued under the Uttar Pradesh Act No. 2 of 1951 were revalidated with effect from June 18, 1951. Hindustan Transport Company and Smt. Chunni Devi the petitioners in writ petitions Nos. 76 and 77 of 1979 held permits to ply State Carriages between Hardoi and Unnao. Unnao is a station between Lucknow and Kanpur. In 1972, the petitioners obtained an extension of their permits enabling them to run their State Carriages on the route Hardoi-Unnao-Kanpur, subject to what are known as "Corridor Restrictions", that is, that the vehicles would not pick up or set down any passengers between Unnao and Kanpur, which was a sector of the nationalised route, Lucknow-Kanpur. It is not known how despite the total exclusion of private operators from plying any Stage Carriage on the whole or any sector of the route Lucknow-Kanpur, the extension of the route Unnao to Kanpur was granted to these two persons. Aggrieved by the order of the Regional Transport Authority granting the extension, the U. P. State Road Transport Corporation filed a revision before the State Transport Appellate Tribunal. The State Transport Appellate Tribunal set aside the order of the Regional Transport Authority on April 18, 1973. A writ petition filed by the two operators was dismissed by the Allahabad High Court on February 27, 1978. The operators had earlier obtained a stay of the operation of the order of the State Transport Appellate Tribunal and were continuing to ply their vehicles on the sector Unnao-Kanpur also. They preferred an appeal (CA Nos. 1411-12 of 1978) to this court and obtained a similar stay.

2. In the meanwhile this court, in Mysore State Road Transport Corpn. v. Mysore State Transport Appellate Tribunal AIR 1974 SC 1940 decided that when there was a total exclusion of private operators in a nationalisation scheme, it was not permissible to allow operators to ply their vehicles even on sectors of the notified route on condition of observing "Corridor Restrictions". As it was thought that a too stringent Application of the principle of the decision was likely to cause hardship in some cases, the Uttar Pradesh Legislature passed the U. P. Motor Vehicles (Special Provisions) Act, 1976 (U. P. Act No. 27 of 1976). Section 5 of U. P. Act No. 27 of 1976 enables the competent authority to authorise "any holder of a permit for a Stage Carriage to ply his Stage Carriage on such portion of a notified route as may be prescribed and for such period and to such terms and conditions which may be in respect of matters specified in Section 48(3) of the principal Act or in respect of any other matter as it thinks fit." For the period during which the authorisation is in force, the scheme is to be deemed to be modified to the extent of the authorisation. It is further provided that it shall be a condition of such authorisation that the owner of a Stage Carriage shall pay such amount to the Corporation as may be fixed by the competent authority having regard to the nature and class of route the distance covered, the sitting capacity and other relevant factors and abide by such administrative and operational control of the Corporation as the competent authority may from time to time direct. Section 3 of the Act provides for the app