The Supreme Court on Tuesday set aside multiple Madhya Pradesh High Court orders that had directed Uttar Pradesh authorities to countersign permits issued to private bus operators on interstate routes. The case, which has been circulating through various benches for nearly a decade, touches the daily mobility of thousands of passengers along Madhya Pradesh–Uttar Pradesh road corridors. The Court said it must clarify a “question of law already settled,” while at the same time urging both states to resolve practical hurdles affecting commuters.
Background
The dispute emerges from the 2006 reciprocal transport agreement between Madhya Pradesh and Uttar Pradesh. Under this agreement, certain interstate routes were exclusively reserved for the Madhya Pradesh State Road Transport Corporation (MPSRTC), listed in what was known as Schedule B. Over time, MPSRTC stopped running its buses on several such routes, reportedly due to financial stress and downsizing.
Private operators stepped in. The Madhya Pradesh State Transport Authority began issuing them permits for these abandoned stretches. However, to lawfully operate across state borders, the operators also needed countersignatures from Uttar Pradesh. The UP transport authorities refused, arguing that parts of these interstate routes overlapped with already “notified” routes reserved for the state-run UP State Road Transport Corporation (UPSRTC).
One PIL and several writ petitions followed. The Madhya Pradesh High Court sided with the permit holders, directing UP to countersign. It even set deadlines. UPSRTC challenged these directions before the Supreme Court.
Court’s Observations
The Bench, led by Justice Dipankar Datta, traced the legal position back through earlier Constitution Bench rulings. The Motor Vehicles Act’s Chapter VI, the Court noted, “overrides all provisions in Chapter V,” meaning state-notified monopoly routes take precedence over inter-state permit arrangements.
Put simply, if a private operator’s interstate route overlaps even a portion of a route reserved for a State Transport Corporation under an approved scheme, the private operator cannot ply there-unless the scheme itself permits exceptions.
“The bench observed, ‘An inter-State agreement, by its very nature, is not law. It cannot override a notified scheme framed under Chapter VI,’” reaffirming earlier landmark rulings.
The Court also pointed out that while the 2006 agreement contemplated shifting those routes to private operators if MPSRTC was shut down, there was no conclusive evidence that MPSRTC had actually been fully wound up. “At best, the material hints at a winding-up process underway,” the bench remarked.
However, the Court did not ignore the reality that passengers are being left stranded or forced to change buses mid-route simply because of procedural and policy deadlocks.
Decision
The Supreme Court set aside all the Madhya Pradesh High Court directions requiring UP authorities to countersign the permits. It also dismissed the pending writ petition seeking similar relief.
At the same time, the Court directed senior transport officials of both states to meet within three months and re-examine whether these interstate routes can be reorganized-especially if MPSRTC’s shutdown is proven. If consensus is reached, private operators may still eventually be allowed; but only through lawful modification of transport schemes.
The proceedings closed with no order regarding costs.
Case: U.P. State Road Transport Corporation v. Kashmiri Lal Batra & Others
Related Matters: Connected Civil Appeals & Writ Petition No. 748 of 2024
Court: Supreme Court of India
Citation: 2025 INSC 1281
Bench: Justice Dipankar Datta and Justice Augustine George Masih
Decision Date: November 04, 2025