IMPORTANT POINTS
State action in quasi judicial matters is not open to question on presumption of bias. However, reasons have to be given and factual and legal objections have to be dealt with.
Although not expressly so required in section 102 M.V. Act, 1988, requirement to record reasons while dealing with objections is not dispensed with.
Not recording reasons renders a decision arbitrary.
Law declared by Court will have retrospective effect unless not declared so specifically. Prospective operation of Court decisions is exception. Power of prospective overruling is vested only in the Supreme Court and that too in constitutional matters.

Headnote:(a) Motor Vehicles Act, 1939 – Section 68C,D,E – Modification of scheme – Quasi judicial matters – Act requiring State to act judicially in considering objections – Action of State not open to question on presumption of bias – However, reasons have to be given – Factual and legal objections have to be dealt with. (Para 12)
       (2002) 2 SCC 560; (1960) 3 SCR 742; (1967) 3 SCR 329; AIR 1959 SC 308 – Relied upon
       (b) Motor Vehicles Act, 1988 – Section 102 – No requirement of recording any express finding on any particular aspect – State duty bound to hear and consider objections – State to act in public interest to cancel or modify a scheme after giving any affected person or body opportunity of hearing – Although not expressly required, requirement to record reasons while dealing with objections not dispensed with – Not recording reasons renders the decision arbitrary. (Para 18, 19, 22)
       (1976) 2 SCC 981; (1990) 4 SCC 594; (1992) 4 SCC 605; (1992) 3 SCC 336; (2008) 3 SCC 469; (2009) 4 SCC 240; (2012) 13 SCC 14 – Relied upon
       (c) Motor Vehicles Act, 1988 – Section 102 – Modification of approved schemes – State only reiterating only public interest and taking shelter behind Ashrafulla Khan’s case – Not considering the objections – Not giving any reasons indicating how the objections are disposed of – Not permissible. (Para 28)
       (1985) 4 SCC 557; (1992) 2 SCC 235 – Relied upon
       (1966) 3 SCR 744; (2003) 11 SCC 441 – Referred
       (d) Constitution of India – Article 136 and 141 – Appeal – Reversal of judgment of High Court – Effect – Will have retrospective effect – Law declared by Court will have retrospective effect unless not declared so specifically – Prospective operation of Court decisions is exception – Power of prospective overruling is vested only in the Supreme Court and that too in constitutional matters. (Para 36, 37)
       (2007) 3 SCC 557; AIR 1967 SC 1643; 1994 Supp (2) SCC 641; (2003) 7 SCC 517 – Relied upon
       Facts of the case:
       The question involved in the appeals is whether the State Government while modifying the scheme under Section 102 of the Motor Vehicles Act, 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.
       The Bellary Scheme was initially notified on 31.10.1962 by Karnataka State Road Transport Corporation, Bangalore, under section 68C of the Motor Vehicles Act, 1939 by which it was proposed to operate stage carriage services on 86 routes in Bellary sector. 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.
       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.
       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.
       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.
       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 the Supreme Court in Karnataka State Road Transport Corporation v. Ashrafulla Khan & Ors. [2002 (2) SCC 560].
       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.
       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.
       The High Court has quashed the modifications so made in the various Schemes.
       Finding of the Court:
       State Government directed to hear and dispose the objections to modification of the schemes. In the meantime arrangements directed by High Court to continue.
       Result: Appeals dismissed.

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 violation

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2014 Supreme(SC) 906

Cases Referred (17)