Fare regulation power cannot impose new pass obligations on private stage carriage operators without lawful permit support.

Section 67 of the Motor Vehicles Act, 1988 could validly support revised service charges for private stage carriage operators using DTC bus shelters and terminals, because those charges were traceable to the existing permit framework and valid permit conditions. However, the State could not use the same power to compel private operators to honour DTC-issued concessional passes, since the permit scheme did not authorise that obligation and no lawful permit condition supported it. Paragraph 3(b) was therefore ultra vires, illegal, and unenforceable, while the remaining notification was upheld.

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Issues: (i) Whether the State Government could, in exercise of power under Section 67 of the Motor Vehicles Act, 1988, revise the service charges payable by private stage carriage operators for use of DTC bus shelters and terminals; (ii) Whether paragraph 3(b) of the impugned notification, making all DTC passes applicable to all private stage carriages, was within the State Government's power.

Issue (i): Whether the State Government could, in exercise of power under Section 67 of the Motor Vehicles Act, 1988, revise the service charges payable by private stage carriage operators for use of DTC bus shelters and terminals.

Analysis: The permit scheme itself required private operators to use authorised DTC bus stops and terminals and to pay service charges determined by the State Transport Authority in consultation with DTC. The permit condition was validly attached under Section 72(2) of the Motor Vehicles Act, 1988, and the power under Section 67 could validly be used to vary fare-related matters and permit conditions already contemplated by the scheme. The revised charges for use of bus shelters and terminals were therefore traceable to the existing permit framework and did not suffer from lack of authority.

Conclusion: The revision of service charges and the connected parts of the notification, other than paragraph 3(b), were valid and intra vires.

Issue (ii): Whether paragraph 3(b) of the impugned notification, making all DTC passes applicable to all private stage carriages, was within the State Government's power.

Analysis: The permit conditions only required honouring of concessional passes authorised by the State Transport Authority. Section 67(1)(d) read with sub-clause (i) empowered the State Government to issue directions on fares and freights, but did not authorise it to compel private operators to accept DTC-issued concessional passes absent a lawful permit condition to that effect. The notification also attempted to shift DTC's loss from its social concessions onto private operators without statutory warrant. That part of the notification therefore exceeded the scope of Section 67 and could not be sustained.

Conclusion: Paragraph 3(b) was ultra vires, illegal, and unenforceable.

Final Conclusion: The challenge succeeded only in part: the notification was upheld except for the direction making DTC passes binding on private stage carriage operators, and the appeal was allowed to that extent with consequential directions for an alternative scheme for student pass holders.

Ratio Decidendi: A power to issue directions on fares under Section 67 of the Motor Vehicles Act, 1988 cannot be used to impose a new obligation on private stage carriage operators to honour concessional passes issued by another operator unless such obligation is supported by the statutory permit framework or a validly imposed permit condition.

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