Well, there is certainly a case for this thing.
But the problem is that, it is a bit tedious to accomplish and shall be difficult to convince the bus operator, unless you have the relevant data to support your case.
It is not difficult to gather the data though, all you need to do is to spend a week or so at Majestic and talk to conductors of different bus operators.
You will have a very sizeable and robust data-set.
Now let's discuss how to do it...
You would need to install
"strain gauges" or, you may call it
"load-sensor", this is what you normally see in a personal weighing scale on all the seats of the bus. This you couple with a timer. Add a GSM module to it.
You put the min load trigger on the gauge at, may be 40Kgs. So if someone has placed a luggage on the seat, it would not show the seat as occupied.
You put the timer at 45 mins, ie the seat will not show vacant, until 45 mins of the gauge trigger going nought. 45 mins is the longest any bus would halt mid-way.
Only issue is if a kid is seated on the seat, it would still show vacant, as trigger wont go off. But such cases would be minimal, as people generally dont travel with their kids for long distances in bus (People who are Volvo class).
I would suggest forget the passenger side, focus on the operators. Every single day, in total, an operator loses Lac of rupees due to the nexus of driver-conductor, and there is no way he can break this, unless you build this.
I have been a salesman all my life, and this would sell like hot-cake. Make it a subscription model. Just focus on the business side, forget the consumer side.
If you intend to build this, please do ping me, I shall do whatever possible in my means to help (I dont want anything in return, either in cash or kind).