Motor Vehicles Act, 1988 | ‘Saved Permits’ Exempt From 140km Cap Until KSRTC Introduces Service: Kerala High Court

“The maximum distance criterion of 140 kilometers in clause (oa) of Rule 2 of the Kerala Motor Vehicles Rules cannot be made applicable in the case of a ‘saved permit’, while considering its renewal, subject to the above restriction imposed under the scheme.” — In a seminal ruling, the High Court of Kerala, comprising Justice Anil K. Narendran and Justice Muralee Krishna S., has modified the judgment of the Single Judge, holding that private stage carriage operators holding "saved permits" are entitled to renewal without the 140-kilometer distance restriction, but with a critical rider: such entitlement subsists only until the Kerala State Road Transport Corporation (KSRTC) applies to introduce a new service on the respective route.

The Battle of 'Saved Permits'

The Division Bench was adjudicating a batch of Writ Appeals filed by the KSRTC and the State officials against a common judgment dated August 1, 2025. The core controversy revolved around the renewal of stage carriage permits held by private operators on nationalized routes. These operators held permits issued prior to the nationalization schemes (specifically before 09.05.2006 and 14.07.2009), classifying them as "saved permits."

The Regional Transport Authorities (RTAs) had refused to renew these permits as "Limited Stop Ordinary Services" (LSOS) for routes exceeding 140 kilometers, citing the definition of LSOS under Rule 2(oa) of the Kerala Motor Vehicles Rules, which imposes a distance cap.

“The scheme formulated and published by the State Government under sub-section (3) of Section 100 of the Act holds the fort in all matters involving permits.”

The 140km Distance Embargo

The KSRTC and the State argued that under the "Super Class Scheme" notified in 2013, the right to operate higher classes of services (Fast Passenger and above) was reserved exclusively for the State Transport Undertaking. Consequently, private operators were relegated to Ordinary Services. The State contended that under the amended Rules, an Ordinary Service cannot exceed 140 kilometers. Therefore, they argued that even "saved permits" must be curtailed to this distance limit upon renewal.

Judicial Reasoning: The 'Saju Varkey' Shield

The Court extensively analyzed the statutory scheme under Chapter VI of the Motor Vehicles Act, 1988, and the binding precedent set in Kerala State Road Transport Corporation v. Saju Varkey [2018 (4) KHC 617]. The Bench reiterated that the rights of "saved permit" holders are anchored in the specific clauses of the Nationalization Schemes (Ext.P5 and Ext.P7) which allowed existing operators to continue.

The Court observed that the introduction of a maximum distance restriction (140 km) via Rule 2(oa) cannot retrospectively impair the rights guaranteed under the "saved" clauses of the Scheme. The Bench affirmed that the Scheme acts as a self-contained code ("law by itself") and overrides inconsistent provisions in the Rules.

“The introduction of a restrictive element, i.e., the stipulation that the maximum distance limit would apply to the saved permits... has, therefore, to be seen as breaching the aforesaid statutory safeguard.”

The KSRTC Caveat: A Conditional Victory

While the Court ruled in favor of the private operators regarding the distance limit, it significantly tightened the tenure of such renewals. Relying on the Supreme Court’s decision in Kerala State Road Transport Corporation v. Baby P.P. [(2018) 7 SCC 501], the High Court clarified that the protection for private operators is not perpetual.

The Bench held that the "exclusion" of private operators is partial only until the KSRTC steps in. The moment KSRTC applies to introduce a new service on a notified route, the corresponding private permit expires and cannot be renewed.

The Court modified the Single Judge's directive. It ordered the RTAs to consider the renewal applications of the writ petitioners without insisting on the curtailment of route length to 140 kilometers. However, this renewal is strictly conditional:

1. No Distance Cap: The 140 km limit in Rule 2(oa) is inapplicable to saved permits.

2. The Guillotine Clause: The renewal is valid only until KSRTC applies for introducing a new service on the route.

3. Non-Renewal: Once KSRTC files such an application, the corresponding number of private permits shall not be renewed.

The RTAs have been directed to process the applications within three months in light of these directions.

Date of Decision: 16.01.2026