Mohammed Shafi - Appellant Versus State of Rajasthan - Respondent

Core ratio / Key holding

Headnote

Motor Vehicles Act, S.63(3-A), S.63(3-B), S.68-D(3) — Reciprocal Transport Agreement — Approved Scheme No. 73 (MP) — Interpretation — Scope of 'reciprocal transport agreement'

Motor Vehicles Act, S.68-B — Approved Scheme vs. Reciprocal Agreement — Constitutional Law — Articles 162, 298 — Supremacy of Law

Motor Vehicles Act, S.68-C, S.68-D — Nationalisation Scheme — Draft Scheme — Reciprocal Agreement — Effect of Draft Schemes

Reciprocal Transport Agreement — Modification — Notice Requirement — Prior Agreement

Motor Vehicles Act, S.63(3-B) — Reciprocal Transport Agreement — Publication — Official Gazette — Validity of Publication

Reciprocal Transport Agreement — Authority to Enter — State Government — Transport Commissioner — Validity of Agreement

Issues for determination

• Whether the Madhya Pradesh approved scheme No. 73 allowed only existing Rajasthan operators to ply and prohibited plying in contravention of the scheme?
• Whether the reciprocal agreement between the States of Rajasthan and Madhya Pradesh, being an administrative act, could override the provisions of the approved scheme?
• Whether the reciprocity agreement should not have been arrived at by the two States in contravention of the two draft schemes published by the Rajasthan State Road Transport Corporation?
• Whether a six months' notice was required before rescinding the 1968 reciprocal agreement and such notice was not given in the present case?
• Whether the agreement was not published in a proper legal form in the Madhya Pradesh Gazette and thus had not come into force?
• Whether the Transport Commissioner, Rajasthan had the authority to enter into the draft agreement on behalf of the State of Rajasthan?
• Whether the reciprocal agreement was not validly enforceable in the absence of ratification by the two State Governments?

Ratio decidendi

• The Madhya Pradesh approved scheme No. 73, which partially excludes private operators, permits the plying of vehicles by Rajasthan State nominees in accordance with a reciprocal transport agreement, and this includes modified or revised agreements, not just existing ones, as such interpretation aligns with the intent to revise services based on public needs.
• A reciprocal transport agreement between States cannot override the provisions of an approved nationalisation scheme, as an approved scheme is law and prevails over inter-State agreements, and executive powers under Articles 162 and 298 of the Constitution do not alter this hierarchy.
• The mere publication of proposed or draft nationalisation schemes does not prohibit States from entering into reciprocal transport agreements, as the final approval, modification, or rejection of such schemes is uncertain and their implementation takes time.
• A reciprocal transport agreement that allows for modification or revision by mutual agreement at any time does not require a six-month prior notice for such modification or revision, even if such notice is stipulated for rescinding the agreement.
• The requirement under Section 63(3-B) of the Motor Vehicles Act for publication of an inter-State reciprocal agreement in the official Gazette is satisfied if the notification clearly states that the agreement was entered into between the States and is published thereunder, even if the preamble or signatures are not fully reproduced in the Gazette, provided the original agreement is duly signed.
• If the Director of Transport or Transport Commissioner is duly authorised by the State Government to enter into or finalise a reciprocal transport agreement, their action in doing so is valid and binding on behalf of the State.

Important points

• Petitioners' challenge to the reciprocal agreement between Rajasthan and Madhya Pradesh was dismissed.
• The new reciprocal agreement was held not to contravene Madhya Pradesh's approved scheme No. 73.
• Mere publication of draft nationalisation schemes does not prohibit States from entering reciprocal agreements.
• The reciprocal agreement's modification did not require six months' prior notice.
• The publication of the reciprocal agreement in the Gazette was found to be valid.
• The Transport Commissioner was held to have the authority to finalise the draft agreement.

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