2026 Supreme(Mad) 1005

IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. Lakshminarayanan, J.
All Omni Bus Owners Association Rep. By Its President - Petitioner
Versus
The Transport Commissioner Cum State Transport Authority – Respondent
WP No. 2301 of 2024 AND WMP NO. 2588 OF 2024, WMP NO. 2587 OF 2024, WMP NO. 2912 OF 2024, WP NO. 2646 OF 2024, WMP NO. 2910 OF 2024, WMP NO. 2911 OF 2024, WMP NO. 2393 OF 2024, WMP NO. 2396 OF 2024, WP NO. 2380 OF 2024, WP NO. 2382 OF 2024, WMP NO. 2491 OF 2024, WMP NO. 2259 OF 2024, WMP NO. 2260 OF 2024, WMP NO. 2261 OF 2024, WMP NO. 2492 OF 2024, WMP NO. 2584 OF 2024, WMP NO. 2582 OF 2024, WMP NO. 2258 OF 2024, WMP NO. 2585 OF 2024, WMP NO. 2586 OF 2024, WP NO. 2109 OF 2024, WP NO. 2110 OF 2024, WP NO. 2205 OF 2024
Decided On : 05-06-2026

Administrative restrictions on transport operations must follow statutory permit modification procedures. A total prohibition on entering designated areas for valid permit holders constitutes an unreasonable restraint on the fundamental right to trade, and destination-based classification of vehicles without a rational nexus violates constitutional equality protections.

Headnote:(A) Motor Vehicles Act, 1988 - Sections 67, 72, 115, 117 - Constitution of India - Articles 14, 19(1)(g) - Administrative order regulating vehicle traffic - Total prohibition on entry of vehicles into city limits - Whether violates right to trade and profession.

(B) Right to trade - A permit holder enjoys a fundamental right to carry on trade and profession. Unilaterally truncating a permit to prevent reaching a specified destination without following mandatory statutory procedures for permit amendment is impermissible. (Para 56)

(C) Reasonable classification - Differentiation made between transport vehicles solely on the basis of their destination is discriminatory and violative of equality before law. Such classification must satisfy the test of being based on intelligible differentia having a rational nexus to the intended objective. (Para 66)

(D) Local authority - The definition of local authority under rule-making powers necessitates that the body must be specifically entrusted with management of municipal or local funds. An entity created for urban development purposes cannot be equated to such a local authority for the purpose of granting approvals for transport stands. (Para 37)

Facts of the case:
Petitioners challenged an administrative order that prohibited certain classes of vehicles from entering city limits and mandated operation from a newly established terminus on the outskirts. The challenge was based on the premise that the order interfered with fundamental rights and lacked proper statutory compliance as the proposing body for the infrastructure did not qualify as a local authority under the applicable transport rules.

Findings of Court:
The administrative order imposing a total ban on the entry of vehicles into the city limits, which otherwise fall within the scope of valid permits, is unconstitutional and illegal. The authority lacks the power to unilaterally modify permit conditions through administrative circulars rather than following established statutory procedures for permit curtailment.

Issues: Whether the administrative order restricting access to city limits for specific categories of transport vehicles was ultra vires, discriminatory, and violative of fundamental rights guaranteed under the Constitution.

Ratio Decidendi: The Court held that while the state has powers to regulate traffic management and decongestion, it cannot impose a total ban on permit holders entering a destination location without following proper legal procedures for permit modification. Furthermore, differentiation based solely on destination is arbitrary and violates equality principles, and the planning authority lacked the legal status to act as a local authority for statutory transport stand approvals.

Result: Writ petitions allowed; impugned order quashed.

Table of Content
1. establishing the factual history and origin of the legal challenge. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. procedural history and the setting of interim equitable arrangements. (Para 11 , 12 , 13 , 14 , 15 , 16)
3. arguments regarding procedural violations of rule 245 and constitutional rights. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24)
4. state submission on public interest, infrastructure development, and statutory authority. (Para 25 , 26 , 27 , 28 , 29 , 30)
5. judicial clarification that cmda does not qualify as a local authority under rule 245. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47)
6. interpretation of rule 245 as enabling flexible post-construction approval via rule 245(e). (Para 48 , 49 , 50 , 51 , 52)
7. invalidation of arbitrary permit restrictions and unauthorized exercise of regulatory powers. (Para 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61)
8. validation of negotiated settlements to balance public interest and transport rights. (Para 62 , 63 , 64 , 65)
9. discriminatory destination-based restrictions violate equality rights and are struck down. (Para 66 , 67)

ORDER :

V. Lakshminarayanan, J.

1.These batch of writ petitions challenge the order passed by the State Transport Authority (hereinafter referred to as ‘STA’), Chepauk, Chennai, on22.01.2024. Hence, they were clubbed together and heard by this Court.

2.These writ petitions have been filed by both the Association of Omni Bus Operators as well as individual operators, who have been granted permits to run omni buses.

The following facts are not in dispute:

3.There exist a stage carriage and a contract carriage bus terminus in Koyambedu. This is situated within the city limits of Chennai. The State of Tamil Nadu took a decision to develop a mofussil bus terminus near Vandalur. On 30.04.2013, the then Chief Minister of Tamil Nadu, made a statement on the floor of the Legislative Assembly of Tamil Nadu, stating that a bus terminus would come on the outskirts of Chennai near Vandalur.

4.Pursuant to this statement, the State of Tamil Nadu issued G.O. (Ms).No.184, Housing and Urban Development Department, dated 10.07.2013. Through this Government Order, administrative sanction was granted for the construction of a bus terminus at Kilambakkam in Chengalpattu District. Pursuant to this order, the government acquired lands for construction of the bus terminus. Thereafter, it issued G.O.(Ms).No.132, Housing and Urban Development Department, dated 19.07.2017. Through this Government Order, two committees were created, one was the Technical Committee and other was the Steering Committee. The Steering Committee decided to construct a unified bus terminus to accommodate both the State Express Transport Corporation (SETC) buses / TNSTC buses and private contract carriage buses. Subsequently, this proposal was taken forward and another Government Order was passed in G.O.(Ms).No.168, Housing and Urban Development Department, dated 04.12.2018. This Government Order accorded revised administrative sanction for the project.

5.The construction of the project was taken up in right earnest.COVID-19 pandemic intervened and therefore, the activities came to a grinding halt. Post pandemic, construction re-commenced and major activities were completed. Thereafter, on 27.12.2022, the Steering Committee created under G.O.(Ms).No.132, met again and decided to affirm its stand for a unified bus stand.

6. Private contract carriage owners and the office bearers of the Tamil Nadu Omni Bus Owners’ Association were called for a meeting on 25.03.2023. In the meeting, certain demands were raised by the office bearers. Subsequent to the meeting, the issues raised by the All India Bus Owners Association were also considered and complied with.

7.The Regional Transport Officer (RTO), Chengalpet District, the 4^th respondent herein, granted approval for the bus stand as a “Special Class” bus stand for a period of three years from 28.06.2023

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