Supreme Court Sets Aside High Court Directions on Countersignature of Inter‑State Permits; Directs State-Level Talks

A bench of Justices Dipankar Datta and Augustine George Masih heard appeals and writ petitions challenging Madhya Pradesh High Court orders that had directed grant and countersignature of stage carriage permits issued under an inter‑State reciprocal transport agreement. The matters raised the question whether private operators could be granted inter‑State permits where portions of those routes overlapped intra‑State notified routes covered by an approved scheme under Chapter VI of the Motor Vehicles Act, 1988.

The Court allowed the civil appeals, set aside the impugned High Court orders and dismissed the writ petition, holding that relief to private operators could not be granted as a matter of course where notified intra‑State routes prevailed under Chapter VI. The Court reiterated binding precedents and explained that an inter‑State reciprocal transport agreement is an agreement between States and “not a law” capable of overriding an approved scheme under Chapter VI. The Court, in its reasoning, observed: The Court also emphasised that "no permission can be granted at this stage to any private operator having a permit issued by the STA, MP to ply his vehicle on an inter‑State route ... which overlaps any notified intra‑State route in the State of UP."

Background

The disputes arose from an inter‑State reciprocal transport agreement (IS‑RT Agreement) executed between the State Transport Authorities of Madhya Pradesh and Uttar Pradesh under Section 88 of the Motor Vehicles Act, 1988. The agreement originally allocated certain routes to the Madhya Pradesh State Road Transport Corporation (MPSRTC) in Schedule B and allowed private operators on Schedule A routes; a clause provided that if MPSRTC was wound up, Schedule B routes could be converted into Schedule A. Private operators obtained temporary permits from the STA, MP for routes which overlapped notified routes in Uttar Pradesh, but the STA, UP refused to countersign.

Kashmiri Lal filed a public interest writ before the Madhya Pradesh High Court seeking a mandamus directing countersignature; the High Court ordered the State of MP to initiate proceedings to grant permanent permits for Schedule B routes and directed the State of UP to countersign. Separate petitions by other permit holders led to similar High Court directions. The Uttar Pradesh State Road Transport Corporation and others challenged those orders before this Court.

Before the Supreme Court, UPSRTC argued lack of maintainability and that private operators had no right to ply on portions of notified intra‑State routes protected by Chapter VI. Permit holders relied on the IS‑RT Agreement and contended that, given MPSRTC’s alleged winding up, the agreement entitled them to permits and countersignature. The Court found that established precedents — including a Constitution Bench decision in Adarsh Travels and later authorities — required that approved schemes and notified routes under Chapter VI prevail over inter‑State agreements under Chapter V. The Court observed that the materials did not conclusively establish that MPSRTC had been wound up and thus relief for private operators was not appropriate. The Court set aside the High Court orders, dismissed Writ Petition No. 748 of 2024, and directed the Principal Secretaries of the Transport Departments of UP and MP to meet within three months to discuss modalities, including possible inclusion of routes in Annexure A if MPSRTC was shown to be wound up, and other consensual adjustments to protect passenger interests.

Case No.: CIVIL APPEAL NO.10522 OF 2025 (lead matter) Case Title: U.P. State Road Transport Corporation through its Chief General Manager v. Kashmiri Lal Batra & Ors. Appearances: For the Petitioner(s): Ms. Garima Prashad, Senior Counsel (for UPSRTC); Mr. Mishra (for State of UP) For the Respondent(s): Ms. Shobha Gupta, Senior Counsel; Mr. B S Rajesh Agrajit (for private permit holders)