The Supreme Court of India on Friday (August 29, 2025) issued notice on a set of petitions filed by the Kerala State Road Transport Corporation (KSRTC) and the State of Kerala, challenging the Kerala High Court’s decision to strike down the State Government’s restriction on granting permits to private stage carriage operators for long-distance routes extending beyond 140 kilometers.

 

A bench comprising Justice P.V. Sanjay Kumar and Justice Satish Chandra Sharma took up the special leave petitions (SLPs) filed both by KSRTC and the State Government. The Court not only issued notice to the private respondents but also sought their response on KSRTC’s interim application seeking a stay on the High Court’s judgment.

 

The controversy arises out of a Government notification that barred private stage carriage operators from operating on inter-district routes exceeding 140 km, leaving such long-distance routes exclusively to KSRTC. The move was justified by the Government on the ground of protecting the financial viability of the state-run transport corporation and ensuring efficient public transport connectivity.

 

However, the Kerala High Court, in a batch of writ petitions filed by private bus operators, quashed the notification. On November 6, 2024, a single bench of Justice D.K. Singh held that the Government’s restriction was legally unsustainable since it was issued without granting a fair hearing or duly considering objections raised by affected operators, as mandated under the relevant rules of the Motor Vehicles Act, 1988 and the Kerala Motor Vehicles Rules.

 

The State and KSRTC challenged the single bench verdict through intra-court appeals, but on March 17, 2025, a division bench of the High Court comprising Justice Anil K. Narendran and Justice Muralee Krishna S. dismissed the appeals, affirming that the Government’s decision was procedurally flawed and violative of natural justice principles.

 

Appearing for KSRTC, counsel argued that the High Court’s judgment has effectively opened up unrestricted entry for private bus operators on long-distance routes, which could severely impact the survival of KSRTC, already burdened with mounting operational losses.

 

The petitions filed before the Supreme Court include:

 

The apex court, while issuing notice, indicated that the issue requires detailed consideration since it involves the delicate balance between state monopoly in transport services and the right of private operators to compete in providing stage carriage services.

 

With the Supreme Court seizing the matter, the question now is whether the State can lawfully restrict private participation in long-distance passenger transport routes to safeguard its transport corporation or whether such restrictions are arbitrary and anti-competitive.

 

The Court is also expected to examine whether the principles of natural justice, as laid down under administrative law, were breached in the issuance of the impugned notification.

 

The matter is likely to have wider implications for public transport policy across states, especially where state-run transport undertakings are facing stiff competition from private bus operators.