2025 INSC 152
SUPREME COURT OF INDIA
(HON’BLE
VIKRAM NATH, J. AND HON’BLE PRASANNA B. VARALE, JJ.)
M/S S.R.S TRAVELS BY
ITS PROPRIETOR K.T. ...
Petitioner
VERSUS
KARNATAKA STATE ROAD
TRANSPORT
Respondent
Civil
Appeal Nos………………………OF 2025 @ SLP(CIVIL) NOS.27833-27834 OF 2011 With Civil
Appeal Nos………………………Of 2025 @Slp(Civil) Nos.25787-25956 Of 2012 With Civil
Appeal Nos………………………Of 2025 @Slp(Civil) Nos.32499-32525 Of 2011-Decided on
06-02-2025
Constitution
Law, Motor Vehicle
(A)
Karnataka Contract Carriages (Acquisition) Act, 1976 - Karnataka Motor Vehicles
Taxation and Certain Other Law (Amendment) Act, 2003, Section 3 - Motor
Vehicles Act, 1988, Section 2(7), 2(40), 68(2), 68(3)(b), 68(5), 96 - Karnataka
Motor Vehicle Rules, 1989, Rule 55 and 56 – Constitution Law – Repeal of Act - Whether the 2003 Repeal Act
repealing the KCCA Act is constitutionally valid, particularly given that the
1976 Act had earlier been upheld by this Court? - KCCA Act, 1976 was enacted
under Entry 42 (Acquisition and requisition of property), and its repeal by the
2003 Repeal Act was effected under Entry 57 of List II, which deals with
taxation—a subject area where the State has independent legislative competence
- The repeal does not alter or contradict the judicial interpretation of the
KCCA Act; rather, it reflects a conscious legislative choice to adapt to new
economic and social conditions - Rationale underlying the 2003 Repeal Act is
sound and consistent with the principles of legislative power - 2003 Repeal
Act, was to improve public transport services and to rectify the shortcomings
of the earlier regulatory regime – Held that Section 3 of the Act, 2003, which
repeals the KCCA Act, is constitutional - The KSRTC challenging the repeal on
these grounds have failed to establish any defect in the exercise of the
Legislature’s power - View taken by the Division Bench of the High Court on
this issue upheld.
(Para 16 to 18)
(B)
Karnataka Contract Carriages (Acquisition) Act, 1976 - Karnataka Motor Vehicles
Taxation and Certain Other Law (Amendment) Act, 2003, Section 3 - Motor
Vehicles Act, 1988, Section 2(7), 2(40), 68(2), 68(3)(b), 68(5), 96 -
Karnataka Motor Vehicle Rules, 1989, Rule 55 and 56 – Motor Vehicles - Delegation
of Power to Grant Permits -
Whether, under Section 68(5) of the MV Act, read with Rule 56 of the
KMV Rules, the STA and RTAs can lawfully delegate the power to grant contract
carriage permits (and related permits) to the Secretary, or whether such power
must remain with the multi-member authorities due to its quasi-judicial
character - Language of Rule 56(1)(d) explicitly differentiates between the
grant of stage carriage permits, which involve complex and inherently quasi-
judicial considerations, and other types of permits that are essentially
administrative in nature - The fact that only the grant of stage carriage
permits is excluded from delegation underscores the Legislature’s intention:
routine and time-sensitive permits such as contract carriage, special, tourist,
and temporary permits can be efficiently processed through delegation to a
competent officer like the Secretary, thereby ensuring that administrative
functions are not unduly delayed by the need for a full board’s involvement –
Held that the power of the STA to delegate the issuance of contract carriage,
special, tourist, and temporary permits to its Secretary is fully supported by
the statutory provisions of Section 68(5) of the MV Act, and Rule
56(1)(d) of the KMV Rules, 1989 - The delegation is a rational and necessary
administrative measure that facilitates prompt and efficient processing of
permit applications without undermining the oversight function of the STA –
Held that the High Court’s reasoning on the non- delegability of permit-granting
power is flawed - The power to delegate, as provided by law, remains intact,
and any decision to the contrary is unsustainable in light of both legislative
intent and practical necessity. impugned orders of the High Court that denied
the delegation power of the STA are set aside, and it is confirmed that the
Secretary of the STA is empowered to grant non-stage carriage permits
(including contract carriage, special, tourist, and temporary permits) in
accordance with Section 68(5) of the MV Act and Rule 56(1)(d) of the
KMV Rules, subject to the limitations and conditions prescribed therein.
(Para 21 to 30)
(C) Motor
Vehicles Act, 1988, Section 2(7), 2(40), 68(5) - Karnataka Motor Vehicle
Rules, 1989, 56(1)(d) – Motor Vehicles - Delegation of quasi-judicial power to
Grant Permits –
Contention on behalf of the appellant that permit-granting is a quasi-judicial
function that must be exercised solely by the composite body of the STA or RTA,
as such functions require deliberation by multiple high- ranking officials,
ensuring that decisions are made with due consideration and dissenting opinions
and that delegating this power to a single officer would undermine the
judicial character of the decision-making process – Held that even if one
accepts that the grant of permits has a quasi-judicial element, it is an
established principle of administrative law that quasi-judicial functions may
be delegated if the enabling statute expressly provides for such delegation -
Here, Section 68(5) of the MV Act, coupled with the specific language
of Rule 56(1)(d) of the KMV Rules makes it clear that the Legislature intended
for the STA to delegate certain routine permit functions - The exclusion of
stage carriage permits from this delegation does not imply that all permit
functions are inherently non-delegable; rather, it reflects a calibrated
approach that distinguishes between complex adjudicatory functions and routine
administrative tasks.
(Para
22 and 23)
JUDGMENT
Vikram Nath, J. :- Delay, if any, is
condoned.
2.
Leave granted.
3.
These appeals arise out of the common judgment and order dated 28.03.2011 of
the High Court of Karnataka in W.A. No. 5466 of 2004 and connected matters. In
view of the multiple appeals that have been filed, there is a need to clarify
the array of parties in the respective SLPs:
I. SLP (C) Nos.
27833-27834 of 2011: Filed by private bus operators.
II. SLP (C) Nos.
32499-525 of 2011: Filed by the Karnataka State Road Transport Authority (STA).
III. SLP (C) Nos.
25787-956 of 2012: Filed by the Karnataka State Road Transport Corporation
(KSRTC), a corporation constituted under the Road Transport Corporations Act,
1950[The 1950 Act]
.
For clarity of
reference in this judgment:
• The Private Bus
Operators and the Karnataka State Road Transport Authority will be referred to
collectively as “the Appellants.”
• The Karnataka State
Road Transport Corporation will be referred to as “the Respondent Corporation”
or “KSRTC.”
4.
The facts leading to the present appeals are as follows:
4.1.
Enactment of the 1976 Act (Karnataka Contract Carriages (Acquisition) Act, 1976[The KCCA Act] )-The 1976 Act was
enacted with the objective of acquiring privately operated contract carriages
to curb their alleged detrimental operation in the State and to bring them
under public control. Under the 1976 Act, once these contract carriages were
acquired, all corresponding permits as well as certificates of registration
stood vested in the State Government. Subsequently, the State Government
transferred these vehicles and permits to State-owned Road Transport
Corporations, notably including the KSRTC.
4.2.
The Act was challenged but upheld by this Court in State of Karnataka v.
Ranganatha Reddy[AIR 1978 SC 215] and
later reaffirmed in Vijayakumar Sharma v. State of Karnataka[AIR 1990 SC
2072] . In these decisions, the Supreme Court recognized that the 1976
Act’s purpose was to further the Directive Principles of State Policy
under Article 39(b) and (c) of the Constitution and did not infringe
any fundamental rights or constitutional principles.
4.3. MV
Act Enactment: In 1988, the Motor Vehicles Act, 1988[MV Act] was enacted by the Parliament. This
Act contains several provisions relevant to the present
matter: Section 2(7) defines “Contract carriage” and Section
2(40) defines “Stage Carriage.” Moreover, Section 68 deals with
transport authorities; in particular, Section 68(2) provides for the
composition of the State Transport Authority[STA]
and the Regional Transport Authority[RTA] ,
mandating that each include a Chairman with judicial experience along with
other members—up to four for the STA and up to two for the RTA. Section
68(3)(b) empowers the STA to perform the duties of the RTA,
and Section 68(5) enables both authorities, under rules made pursuant
to Section 96, to delegate their powers and functions to any other
authority or person subject to prescribed restrictions.
4.4.
On 1 July 1989, the Karnataka Motor Vehicle Rules, 1989[KMV Rules] were enacted. Under Rules 55 and 56 of these
Rules, the RTA and STA were empowered to delegate their powers to their
secretaries, including the authority to grant contract carriage permits.
Furthermore, on 27 February 1990, the constitutionality of the KCCA Act was
challenged on the ground of repugnancy. In Vijay Kumar Sharma v.
State of Karnataka[(1990) 2 SCC 562],
this Hon'ble Court upheld the constitutionality of the KCCA Act, holding
that there is no inconsistency or repugnancy between the KCCA Act and the
MV Act.
4.5.
In the subsequent decades, transport policy in Karnataka underwent shifts due
to rising demand for public transport services, rapid urbanization, and the
perceived inability of government-run corporations alone to meet commuter
needs. Over time, committees such as the Tax Reforms Commission observed that
strict limitations on private contract carriages had contributed to an
artificial scarcity of public transport options. It was noted that in many
rural and semi-urban areas, a shortage of KSRTC-run buses compelled travellers
to rely on private goods vehicles, tractors, or other sub- optimal modes of
travel, raising concerns of safety and inconvenience.
4.6.
Enactment of the 2003 Repeal Act (Karnataka Act No. 9 of 2003) - Responding to
these developments, the State Legislature passed the Karnataka Motor Vehicles
Taxation and Certain Other Law (Amendment) Act, 2003[The 2003 Repeal Act or Karnataka Act No.9 of 2003].
Among other amendments (notably to taxation laws), Section 3 of the
2003 Repeal Act repealed the 1976 KCCA Act. According to the Statement of
Objects and Reasons appended to the 2003 Act, the legislative intent was to
liberalize public transport, encourage private operators, and address “woeful
shortages” in passenger services. The Legislature believed that removing the
KCCA Act’s prohibitions would enable better competition, expanded services, and
ultimately greater passenger comfort.
4.7.
Challenge Before the High Court of Karnataka- After 2003, private bus operators
began applying for contract carriage permits under the more liberal regime. In
some instances, Secretaries of the STA or RTAs granted these permits, relying
on purported delegations under Rule 56. Meanwhile, KSRTC and its employees’
federation filed various writ petitions challenging (a) the validity of the
2003 Repeal Act and (b) the power of the Secretaries to grant permits.
They argued that the 1976 Act, having been upheld by the Supreme Court, could
not be repealed without fresh Presidential assent, and contended that awarding
permit- granting power which was quasi judicial to a single officer ought to
remain vested only in multi-member bodies.
4.8.
In a judgment and order dated 17 November 2004 in W.P. No. 40339/2004 and
related matters, the Single Judge of the High Court held that Rules 55 and 56
of the KMV Rules are null and void as ultra vires the MV Act, and that the
delegation of the power to issue contract carriage and stage carriage permits,
as well as to perform the functions of the STA/RTA, to the Secretary is not
permissible. On 16 December 2004, the Learned Single Judge of the High Court
ruled that the repeal of the KCCA Act by Act No. 9/2003 is unconstitutional.
Citing the decisions in Ranganatha Reddy (Supra) and Vijayakumar
Sharma (Supra), the Judge observed that the State Government lacks the
authority to repeal an Act that has received the President’s assent. Since
the KCCA Act falls under Entry 42 of the Concurrent List in the Seventh
Schedule of the Constitution, Act No. 9/2003 was required to be sent for
the President’s assent. It further noted that, by repealing the KCCA, the
objective of the State Transport Undertaking could not be achieved, and that
the issue could have been resolved by granting additional permits to the State
Transport Corporation.
4.9.
Reference to Division Bench- Ultimately, appeals (W.A. Nos. 5466/2004, 60/2005,
and connected matters) were placed before a Division Bench. The Division Bench
consolidated multiple challenges to the 2003 Repeal Act, as well as the dispute
about whether the Secretary, STA could lawfully grant permits.
4.10.
Vide order dated 28.03.2011, the Division Bench of the High Court gave the
following findings with respect to the main issues in these matters:
• Constitutional Validity of the 2003 Repeal
Act- The Division Bench upheld the constitutionality of repealing the 1976 Act.
It reasoned that the Legislature had plenary power to repeal a statute if it
fell within its legislative domain. The bench also noted that since the 1976
Act had been validly enacted under Entry 42 of List III (Concurrent List), the
State Government was equally competent to repeal it, without requiring a fresh
reference to the President for assent. The Court disagreed with the contention
that repealing an Act previously upheld by the Supreme Court amounted to
“overruling” the Supreme Court. Once the 1976 Act had been constitutionally
affirmed, the Legislature’s power to modify or repeal it remained unimpaired,
subject only to not violating fundamental or constitutional rights.
• Delegation of
Permit-Granting Power to the Secretary- The Division Bench, however, rejected
the argument that the STA (or RTA) could delegate contract carriage
permit issuance to the Secretary. It held that permit-granting under
Chapter V is a quasi-judicial function requiring collective adjudication or at
least decision-making by the statutory authority itself. The High Court thus
invalidated the relevant portion of the KMV Rules (Rule 56) or, more precisely,
the manner in which the STA had invoked it. The Division Bench concluded that the
“Secretary alone” approach improperly bypassed the multi- member scheme
envisaged by the MV Act.
4.11.
Aggrieved by the Division Bench’s order dated 28.03.2011, the private bus
operators and the Karnataka STA; and the KSRTC, filed Special Leave Petitions
before this Court, leading to the present appeals with the following main
contentions:
• SLP (C) Nos.
27833-27834 of 2011: Filed by private bus operators, challenging the High
Court’s ruling that prohibits delegation of permit-granting powers to the Secretary,
STA/RTA. These appellants accept the High Court’s decision upholding the
validity of the 2003 Repeal Act.
• SLP (C) Nos.
32499-525 of 2011: Filed by the Karnataka State Road Transport Authority (STA),
similarly challenging the portion of the judgment that disallows delegation to
the Secretary. STA supports the validity of the 2003 Repeal Act.
• SLP (C) Nos.
25787-956 of 2012: Filed by the Karnataka State Road Transport Corporation
(KSRTC), primarily disputing the High Court’s conclusion that repealing the
1976 Act is constitutional. It wants the 2003 Repeal Act declared invalid but
concurs with the High Court that the Secretary, STA/RTA, cannot grant or renew
permits under delegated power.
5.
Before we delve into the specific controversies arising in these appeals, it
would be instructive to first set out the relevant legal provisions that govern
the issues at hand. A clear understanding of these enactments is vital to
appreciate the two principal questions that fall for our consideration.
I. Karnataka Contract
Carriages (Acquisition) Act, Purpose and Scope- Enacted with the objective
of acquiring privately operated contract carriages that were perceived to be
functioning contrary to public interest. Once acquired, the vehicles, permits,
and certificates of registration vested in the State Government, which, in
turn, transferred them to state-owned road transport corporations such as
KSRTC.
Judicial Endorsement-
The 1976 Act was upheld by this Court in State of Karnataka v. Ranganatha
Reddy[AIR 1978 SC 215] and
later reaffirmed in Vijayakumar Sharma v. State of Karnataka[(AIR) 1990 SC 2072]. These decisions
recognized that the statutory objective, furthering the Directive Principles
under Article 39(b) and (c) of the Constitution, did not violate any
fundamental or constitutional rights.
Subsequent
Development- By virtue of Section 3 of the Karnataka Motor Vehicles Taxation
and Certain Other Law (Amendment) Act, 2003 (Karnataka Act No. 9 of
2003), the 1976 Act stood repealed, which is one of the core issues challenged
in these proceedings.
II. Karnataka Motor
Vehicles Taxation and (Amendment) Act, 2003 Statement of Objects and Reasons-
The Legislature observed a shortage of passenger transport services, especially
in rural and semi- urban areas, and took the view that permitting private
operators in the contract carriage sector would help meet rising
demand. Section 3 of this enactment repealed the 1976 Act, thereby
removing existing curbs on private contract carriage operation and paving the
way for a more liberalized regulatory regime.
Legislative
Competence- Enacted under the same legislative field (Entry 42, List III of the
Seventh Schedule to the Constitution) that empowered the original 1976 Act. The
Division Bench of the High Court held that there was no requirement of
fresh Presidential assent for the repeal, and it affirmed that the State
Legislature was competent to affect such a repeal.
III. Motor
Vehicles Act, 1988 Chapter V: Control of Transport Vehicles Section
66: No owner can use or permit the use of a transport vehicle without a valid
permit. Section 68(3): Enumerates the powers and functions of the STA and
RTA, including the grant of various permits.
Section 68(5): Permits
the STA or RTA, “if authorised by the Rules made under Section 96,” to
delegate any of its powers or functions to any other authority or person,
subject to prescribed conditions.
Chapter VI: Special
Provisions Relating to State Transport Undertakings (for completeness)- While
primarily not at issue in these appeals, Chapter VI establishes procedures for
formulating schemes granting exclusive rights to State Transport Undertakings.
This chapter was relevant in the earlier era when nationalization of
routes was prevalent; however, the main focus here is on whether the 1976 Act’s
approach (acquiring contract carriages) could be rescinded by the 2003 repeal.
IV. Karnataka Motor
Vehicles Rules, 1989 Rule 54: Governs the manner in which the STA and the RTA
conduct their business, including guidelines for meetings, quorums, and
decision- making.
Rule 56: Delegation of
Powers by the STA- Rule 56(1)(d): Allows the STA to delegate its power to grant
“a permit other than a stage carriage permit” to the Chairman, the Secretary,
or an officer not below the rank of Regional Transport Officer. The High Court
construed this provision to mean that, while the Rules contemplated delegation,
the question remained whether such delegation extended to quasi-judicial
functions (like granting contract carriage permits) or was confined to purely
administrative powers.
6.
In light of the foregoing factual matrix and the contentions urged before us,
the following principal issues arise for determination:
I. Validity of the
2003 Repeal Act: Whether the 2003 Repeal Act repealing the KCCA Act is
constitutionally valid, particularly given that the 1976 Act had earlier been
upheld by this Court.
II. Delegation of
Power to Grant Permits: Whether, under Section 68(5) of the MV Act,
read with Rule 56 of the KMV Rules, the STA and RTAs can lawfully delegate the
power to grant contract carriage permits (and related permits) to the
Secretary, or whether such power must remain with the multi-member authorities
due to its quasi-judicial character.
7.
The learned Senior Counsel for the Appellants, Mr. Devadatt Kamat, has advanced
the following main submissions:
7.1.
Express Provision in the MV Act and KMV Rules: The Appellants rely
on Section 68(5) of the MV Act, which provides that the STA and any
RTA, if authorised under rules made pursuant to Section 96 of
the MV Act, may delegate their powers and functions subject to prescribed
restrictions. They further highlight Rule 56(1)(d) of the KMV Rules, which
expressly permits the STA to delegate its power to grant a permit other than a
stage carriage permit to the Chairman, Secretary, or any officer not below the
rank of a Regional Transport Officer. This statutory scheme clearly
distinguishes between stage carriage permits (non-delegable) and other permits
(delegable).
7.2.
Consistency with Legislative Intent: The Appellants contend that the MV
Act was designed to confer broad administrative discretion on the STA and
RTAs. They argued that the power to delegate, as provided in Section
68(5) of the MV Act, was meant to ensure administrative efficiency in routine
matters like the issuance of contract carriage permits. They maintained that
the legislative intent was not to require that every decision be taken by a
full, multi-member board but rather to facilitate expeditious processing of
permit applications in cases that do not involve the complex
considerations inherent in stage carriage permits.
7.3.
Practical Necessity and Administrative Efficiency: The Appellants argued that
in practice, the STA is inundated with diverse functions and that delegating routine
permit issuance to the Secretary, a high-ranking officer with substantial
expertise in transport matters, ensures timely and efficient service. They
further contended that such delegation is a common administrative practice not
only in Karnataka but also in several other States, where similar delegation
mechanisms have been effectively implemented.
7.4.
Reconciliation of Divergent Judicial Approaches: The Appellants noted that the
High Court, in its earlier judgments, appeared to split the issue. In one
instance, the learned Single Judge held that the grant of permits is
quasi-judicial and cannot be delegated, while in another, it recognized that
delegation is permissible if rules are framed under Section
96 of the MV Act. The Appellants argued that the latter view reflects the
true statutory scheme.
They
submitted that by incorporating amendments to the KMV Rules (notably, the
inclusion of Section 96), the State has unambiguously affirmed its
intention to delegate routine functions, such as the issuance of contract
carriage permits, to the Secretary. 7.5. Delegation Does Not Subvert Judicial
Oversight: It is submitted that even if the power to grant permits were
quasi-judicial, such functions can be delegated provided the enabling statute
expressly permits it. The Appellants have relied on the recent decision
in Newtech Promoters & Developers Private Limited v. State of Uttar
Pradesh & Others[(2021) 18 SCC 1],
to support the view that quasi-judicial functions may be delegated when done so
in accordance with statutory provisions. The Appellants stress that the
delegation in this instance is limited to contract carriage,
special, tourist, and temporary permits, matters that are routine and do
not necessitate the full weight of collective adjudication. This is entirely
consistent with the legislative scheme of the MV Act and the KMV
Rules.
7.6.
Operational Practicalities and the Necessity of Delegation: The Appellants
submit that requiring the entire STA or RTA to sit on routine permit
applications would be impractical and could lead to delays in service delivery.
They argue that the Secretary, being a competent and experienced officer, is
fully capable of exercising the delegated power without compromising the
statutory framework. Such delegation is vital for the smooth functioning of the
transport regulatory system.
8.
The learned Senior Counsel for the Respondent Corporation, Ms. Kiran Suri, has
advanced the following arguments on behalf of the KSRTC:
8.1. On the Invalidity
of Section 3 of the 2003 Act (Repeal of the 1976 Act): KSRTC contends
that the KCCA Act was in force for 27 years during which no contract
carriage permits were issued by the STA or RTA, and that alternative transport
services adequately served the public interest. They argue that the 1976 Act,
enacted under Entry 42 and with Presidential assent, created exclusive rights
for KSRTC, and its repeal was a deliberate statutory measure that should not be
overturned.
8.2. Incompatibility
of the 2003 Act with Constitutional Requirements: The learned Senior Counsel
contends that the 2003 Act repeals the 1976 Act by invoking Entry 57 of List II
(taxation on vehicles), which deals with a matter entirely distinct from
acquisition. Since the parent 1976 Act was enacted under Entry 42 and with
Presidential assent, its repeal or amendment should likewise be affected under
the same constitutional basis. The State Legislature’s attempt to repeal it
indirectly via a taxation measure violates the constitutional scheme and is
thereby ultra vires.
8.3. Undermining of
Judicial Precedents and Public Policy: The Respondent Corporation argues
that the Division Bench erred by ignoring the constitutional provisions under
which the 1976 Act was enacted. Repealing the 1976 Act not only nullifies the
binding decisions of this Court in State of Karnataka v. Ranganatha
Reddy (Supra) and Vijayakumar Sharma v. State of Karnataka but
also frustrates the statutory purpose of curbing the misuse of contract
carriage permits. Moreover, the repeal undermines the public interest by
removing a crucial mechanism that ensured that private operators did not
convert contract carriage permits into an avenue for operating stage carriages,
thus protecting both the KSRTC’s statutory monopoly and the traveling public.
8.4. Financial and
Operational Impact on KSRTC:
It is further
submitted that, pursuant to the 1976 Act, KSRTC had acquired approximately 200
contract carriage buses, compensated the private owners, and absorbed their
employees— thereby creating a statutory right and a long-established
operational framework. The abrupt repeal imposed an undue financial and
operational burden on KSRTC, jeopardizing its economic viability and
contravening the very objectives for which the 1976 Act was enacted.
8.5. On the
Non-Delegability of the Power to Issue Permits: The Respondent Corporation
concurs with the High Court’s holding that the power to grant Contract Carriage
Permits is a quasi- judicial function, expressly vested in the STA or the RTA
as composite bodies. The relevant provisions of the MV Act,
particularly Sections 68, 69, and 74, together with Rule 56 of
the KMV Rules clearly indicate that the power to issue such permits is intended
to be exercised by a multi-member body and not by a single officer.
8.6. Inadmissibility
of Delegation to a Single Officer: It is submitted that delegation of the
permit-granting power to the Secretary (or any prescribed officer) is contrary
to the statutory scheme. Such a delegation would effectively replace the collective
decision-making process with the unilateral discretion of a single
official, thereby defeating the purpose of the quasi- judicial function
entrusted to the STA/RTA. The learned Senior Counsel emphasizes that the
legislative mandate, as enshrined in Section 68(2) of the MV Act,
requires that the STA be comprised of a Chairman (with judicial or appellate
experience) and not more than three other members. No provision in the enabling
Act permits the vesting of such critical power in a sole officer.
8.7. Excessive
Delegation and Its Consequences:
It is further asserted
that the amended Rules, particularly the amendments made on 18.07.2005 under
the rule-making power invoked under Section 96 of the MV Act, have
excessively delegated the power to the Secretary, amounting to a de facto
rewriting of Sections 68 and 96 of the MV Act. Such
excessive delegation is not only inconsistent with the statutory structure but
also impermissible under the General Clauses Act, 1897, which mandates
that the exercise of rule-making power must be strictly confined to the
framework provided by the parent Act.
8.8. Legislative
Intent and Judicial Oversight:
The Respondent
Corporation further contends that the legislative intent was unambiguously to
vest the power of granting Contract Carriage Permits in a body of high-ranking
officials, whose collective judgment is essential to ensure transparency and
prevent arbitrary decisions. The delegation of this power to the Secretary, an
officer whose duties and responsibilities are otherwise circumscribed, is
therefore contrary to both the letter and the spirit of the MV
Act and the KMV Rules.
8.9. Post-Judgment
Developments (Ancillary Submissions): Subsequent to the repeal of the 1976 Act,
there has been a resurgence of misuse wherein private operators, under the
guise of Contract Carriage Permits, have operated their vehicles as stage
carriages. This misuse has led to seizures, penalties, and significant
financial losses to the State and KSRTC.
8.10. State
Policy Shifts and Recent Developments: It is further submitted that recent
policy measures, such as the nationalization of routes (as per the Gazette
Notification dated 07.03.2019) and the introduction of schemes like the
“Shakthi Scheme” providing free bus services to women, further underscore the
necessity for a robust, state-controlled transport framework. These
developments accentuate the adverse impact of repealing the 1976 Act and the
detrimental effect of delegating quasi-judicial powers to a single officer on
the efficiency and accountability of the state transport system.
9.
We shall now be dealing with each of the issues that arise before us.
ISSUE
I- VALIDITY OF THE 2003 REPEAL ACT
10.
It is a well-settled principle that the power to repeal a law is coextensive
with the power to enact it. In this context, the KCCA Act was enacted under
Entry 42 of the Seventh Schedule of the Constitution, and it received the
assent of the President of India. The KCCA Act was designed to bring privately
operated contract carriages under state control in order to serve the public
interest and to implement the Directive Principles of State Policy, notably
under Article 39(b) and (c). However, over the ensuing decades, the
transport landscape in Karnataka underwent significant changes—urbanization
intensified, public transport demand grew, and it became increasingly evident
that the restrictive regime established by the KCCA Act was contributing to an
artificial scarcity of public transport services, particularly in rural and
semi-urban areas.
11.
In response to these evolving circumstances, the Legislature exercised its
plenary power by enacting the Karnataka Motor Vehicles Taxation and Certain
Other Law (Amendment) Act, 2003 (hereinafter, the 2003 Repeal Act), which
repealed the KCCA Act. The repeal was not an arbitrary act of legislative whim
but was backed by a clear statement of objects and reasons that identified the
deficiencies in the existing regulatory framework and the necessity to
liberalize the transport sector. The intention was to dismantle the
statutory monopoly that the KCCA Act had created for the KSRTC and to open the
door for private operators to address the burgeoning public transport needs.
12.
The Preamble to 2003 Repeal Act reads as follows:
“An Act further
to amend the Karnataka Motor Vehicles Taxation Act, 1957 and to
repeal the Karnataka Contract Carriages (Acquisition) Act, 1976.
Whereas it is expedient
further to amend the Karnataka Motor Vehicles Taxation Act,
1957 (Karnataka Act 35 of 1957) and to repeal the Karnataka Contract
Carriages (Acquisition) Act,1976 (Karnataka Act 21 of 1976) for the purposes
hereinafter appearing;” Moreover, the Statement of Objects and Reasons of this
act reads as follows:
“STATEMENT OF OBJECTS AND
REASONS
(As appended to at the time of
Introduction)
It is considered
necessary to amend the Karnataka Motor Vehicles Taxation Act,
1957 (Karnataka Act 35 of 1957) and to repeal the Karnataka Contract
Carriages (Acquisition) Act, 1976 (Karnataka Act 21 of 1976) to give
effect to the proposals made in the Budget Speech and matters connected
therewith.”
13.
The contention advanced by the Respondent Corporation (KSRTC) that repealing
the KCCA Act is unconstitutional because it effectively overrules the decisions
of the Supreme Court in Ranganatha Reddy (Supra) and Vijayakumar
Sharma (Supra) fails to recognize the dynamic nature of legislative
policy. Those Supreme Court decisions merely affirmed the constitutional
validity of the KCCA Act at the time of its enactment; they do not bind the
Legislature from modifying or repealing a statute when subsequent developments
warrant a change in policy. Moreover, the argument that the repeal should have
required fresh presidential assent is misplaced. A repeal statute does not
recreate the legal framework anew but rather extinguishes the earlier Act’s
operative provisions; it is not subject to the same procedural requirements as
an original enactment when it comes to the need for fresh assent, provided that
the repeal falls within the legislative competence of the State.
14.
Furthermore, the 2003 Repeal Act is rooted in the practical realities of modern
transport policy. Contemporary challenges, such as increasing demand for public
transport services, congestion in urban areas, and the need for efficient
service delivery, necessitated a more flexible regulatory regime. The
legislative history and the Statement of Objects and Reasons attached to the
2003 Repeal Act make it clear that the Legislature intended to remedy the
inefficiencies of the past by introducing competition into the transport
sector. The repeal of the KCCA Act was thus a deliberate policy decision aimed
at fostering a more dynamic and responsive transport framework rather than an
attempt to nullify well-established judicial pronouncements.
15.
Additionally, it has been held on various instances by this Court that a
Legislature may, subject to constitutional limitations, repeal any law it has
enacted. In Ramakrishna v. Janpad Sabha[AIR
1962 SC 1073], it has been emphatically held that if the Legislature has
the power to enact a law on a particular subject, it equally possesses the
power to repeal that law. The relevant paras of this judgement have been
reproduced hereunder:
“13. It must however
be observed that merely because the legislature is empowered under this entry
to constitute local authorities and vest them with powers and jurisdiction it
would not follow that these local bodies could be vested with authority to levy
any and every tax for the purpose of raising revenue for the purposes of local
administration. They could be validly authorised to raise only those taxes
which the province could raise under and by virtue of the relevant entries in
the Provincial Legislative List. This is on the principle that the province
could not authorise local bodies created by it to impose taxes which it itself
could not directly levy for the purposes of the Provincial Government. Now
comes the question whether the Provincial Legislature was competent, by
legislation, to discontinue the levy of the tax by effecting a repeal of the
taxing provision contained in the Local Self Government Act of 1920. There is
no doubt that the general principle is that the power of a legislative body to
repeal a law is co extensive with its power to enact such law, as would be seen
from the following passage in the judgment by Lord Watson in Attorney-General
for Ontario v. Attorney-General for the Dominion [(1896) AC 348 at p. 366] :
“Neither the
Parliament of Canada nor the Provincial Legislatures have authority
to repeal statutes which they could not directly enact.” But obviously it
application in particular instances would be controlled by express
constitutional provision modifying the same. We have such a provision in the
case on hand in Section 143(2) of the Government of India Act, 1935.
In the context the relevant words of the sub- section could only mean “may
continue to be levied if so desired by the Provincial Legislature” which is
indicated by or is implicit in the use of the expression “may” in the clause
“may be continued until provision to the contrary is made by the Federal
Legislature”. This would therefore posit a limited legislative power in the
province to indicate or express a desire to continue or not to continue the
levy. If in the exercise of this limited power the province desires to
discontinue the tax and effects a repeal of the relevant statute the repeal
would be effective. Of course in the absence of legislation indicating a desire
to discontinue the tax, the effect of the provision of the Constitution would
be to enable the continuance of the power to levy the tax but this does not
alter the fact that the provision by its implication confers a limited
legislative power to desire or not to desire the continuance of the levy
subject to the overriding power of the Central Legislature to put an end to its
continuance and it is on the basis of the existence of this limited legislative
power that the right of the Provincial Legislature to repeal the taxation
provision under the Act of 1920 could be rested. Suppose for instance,
a Provincial Legislature desires the continuance of the tax but considers
the rate too high and wishes it to be reduced and passes an enactment for that
purpose, it cannot be that the legislation is incompetent and that the State
Government must permit the local authority to levy tax at the same rate as
prevailed on 1-4-1937, if the latter desired the continuance of the tax. If
such a legislation were enacted to achieve a reduction of the rate of the duty,
“its legislative competence must obviously be traceable to the power contained
in the words” may continue to be levied in Section 143(2) of the
Government of India Act. If we are right so far it would follow that in the
exercise of this limited legislative power the Provincial Legislature would
also have a right to legislate for the continuance of the tax provided, if of
course, the other conditions of Section 143(2) are satisfied viz. (1) that the
tax was one which was lawfully levied by a local authority for the purposes of
a local area at the commencement of Part III of the Government of India
Act, (2) that the identity of the body that collects the tax, the area for
whose benefit the tax is to be utilised and the purposes for which the
utilisation is to take place continue to be the same, and (3) the rate of the
tax is not enhanced nor its incidence in any manner altered, so that it
continues to be same tax. If as we have held earlier there is a limited
legislative power in the province to enact a law with reference to the tax levy
so as to continue it, the validity of the Act of 1949 which manifested the
legislative intent to continue the tax without any break the legal continuity
being established by the retrospective operation of the provision, has to be
upheld.”
16.
The KCCA Act was enacted under Entry 42 (Acquisition and requisition of property),
and its repeal by the 2003 Repeal Act was effected under Entry 57 of List II,
which deals with taxation—a subject area where the State has independent
legislative competence. The repeal does not alter or contradict the judicial
interpretation of the KCCA Act; rather, it reflects a conscious legislative
choice to adapt to new economic and social conditions.
17.
In view of these considerations, the rationale underlying the 2003 Repeal Act
is sound and consistent with the principles of legislative power. The arguments
advanced by the Respondent Corporation, that the repeal would amount to an
impermissible overruling of prior Supreme Court decisions, that it violates the
requirement of presidential assent, or that it is otherwise beyond the legislative
competence of the State, are untenable. The legislative intent, as clearly
articulated in the
2003
Repeal Act, was to improve public transport services and to rectify the
shortcomings of the earlier regulatory regime. Accordingly, we hold that
Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law
(Amendment) Act, 2003, which repeals the KCCA Act, is constitutional. The KSRTC
challenging the repeal on these grounds have failed to establish any defect in
the exercise of the Legislature’s power.
18.
In view of the foregoing analysis, we concur with the view taken by the
Division Bench of the High Court on this issue. We hold that Section 3 of the
Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003,
which repeals the KCCA Act, is constitutional, and the State Legislature has
rightly exercised its power to repeal the Act.
ISSUE
II- DELEGATION OF POWER TO GRANT PERMITS
19.
The next issue before us is whether the STA has the power to delegate its
functions, specifically, the issuance of contract carriage, special, tourist,
and temporary permits, to its Secretary. In this regard, the statutory
framework provides clear guidance.
20. Section
68(5) of the Motor Vehicles Act, 1988 states:
"The State
Transport Authority and any Regional Transport Authority, if authorised in this
behalf by rules made under Section 96, may delegate such of its powers and
functions to such authority or person subject to such restrictions, limitations
and conditions as may be prescribed by the said rules."
This provision
unambiguously confers upon the STA and RTA the power to delegate its functions
provided that rules are framed under Section 96 of the Act. In the
present context, the delegation in question concerns the grant of permits that
are not stage carriage permits. This is further clarified in Rule 56(1)(d) of
the KMV Rules, which reads as follows:
"56. DELEGATION
OF POWERS BY STATE TRANSPORT AUTHORITY:
1. The State Transport
Authority may, by a general or special resolution recorded in its proceedings,
delegates:-
(d) its power to grant
a permit other than a stage carriage permit on an application made to the
Chairman or Secretary or any officer of the Motor Vehicles Department not
below the rank of a Regional Transport Officer with reference to the
notification issued under sub-section (2) of Section 69."
21.
The language of Rule 56(1)(d) explicitly differentiates between the grant of stage
carriage permits, which involve complex and inherently quasi- judicial
considerations, and other types of permits that are essentially administrative
in nature. The fact that only the grant of stage carriage permits is excluded
from delegation underscores the Legislature’s intention: routine and
time-sensitive permits such as contract carriage, special, tourist, and
temporary permits can be efficiently processed through delegation to a
competent officer like the Secretary, thereby ensuring that administrative
functions are not unduly delayed by the need for a full board’s involvement.
22.
The Respondents argue that permit-granting is a quasi-judicial function that
must be exercised solely by the composite body of the STA or RTA, as such
functions require deliberation by multiple high- ranking officials, ensuring
that decisions are made with due consideration and dissenting opinions. They
contend that delegating this power to a single officer would undermine the
judicial character of the decision-making process. However, this argument does
not withstand if we have a closer analysis of the statutory provisions.
23.
Firstly, even if one accepts that the grant of permits has a quasi-judicial
element, it is an established principle of administrative law that
quasi-judicial functions may be delegated if the enabling statute expressly
provides for such delegation. Here, Section 68(5) of the MV Act,
coupled with the specific language of Rule 56(1)(d) of the KMV Rules makes it
clear that the Legislature intended for the STA to delegate certain routine
permit functions. The exclusion of stage carriage permits from this delegation
does not imply that all permit functions are inherently non-delegable; rather,
it reflects a calibrated approach that distinguishes between complex
adjudicatory functions and routine administrative tasks.
24.
Secondly, from a practical standpoint, the STA is entrusted with a wide range
of responsibilities under the Motor Vehicles Act, and its
workload necessitates delegation to ensure timely service delivery. The
Secretary, being a high-ranking officer with substantial expertise in transport
administration, is well equipped to handle routine permit applications. The
delegation mechanism is not a blank check for arbitrary decision-making; it
operates within the boundaries and conditions prescribed by the enabling rules
framed under Section 96 of the MV Act. This ensures that, while
administrative efficiency is achieved, there remains adequate oversight and
accountability through the broader STA framework.
25.
Moreover, the High Court’s reasoning in this regard appears to have conflated
the inherent quasi- judicial nature of certain decisions with the broader
statutory power of delegation. The High Court held that because permit-granting
is quasi-judicial, it cannot be delegated to a single officer. However, this
view fails to recognize that delegation does not remove judicial oversight from
the process. Instead, it merely streamlines routine functions that do not
require the full deliberative process of the STA. In Newtech Promoters &
Developers (P) Ltd. v. State of U.P.
[(2021) 18 SCC 1], this Court has affirmed that even quasi- judicial
functions may be delegated if the statute provides for it and if appropriate
safeguards are in place. The relevant paras of this judgement are reproduced
hereunder:
“114. It is a
well-established principle of interpretation of law that the court should read
the section in literal sense and cannot rewrite it to suit its convenience; nor
does any canon of construction permit the court to read the section in such a
manner as to render it to some extent otiose. Section 81 of the Act
positively empowers the Authority to delegate such of its powers and functions
to any member by a general or a special order with an exception to make
regulations under Section 85 of the Act. As a consequence, except the
power to make regulations under Section 85 of the Act, other powers
and functions of the Authority, by a general or special order, if delegated to
a Single Member of the Authority is indeed within the fold of Section
81 of the Act.
115. The further
submission made by the learned counsel for the promoters that Section
81 of the Act empowers even delegation to any officer of the Authority or
any other person, it is true that the Authority, by general or special order,
can delegate any of its powers and functions to be exercised by any member
or officer of the Authority or any other person but we are not examining the
delegation of power to any third party. To be more specific, this Court is
examining the limited question as to whether the power under Section
81 of the Act can be delegated by the Authority to any of its member to
decide the complaint under Section 31 of the Act.
What has been urged by
the learned counsel for the promoters is hypothetical which does not arise in
the facts of the case. If the delegation is made at any point of time which is
in contravention to the scheme of the Act or is not going to serve the purpose
and object with which power to delegate has been mandated under Section
81 of the Act, it is always open for judicial review.
116. The further
submission made by the learned counsel for the appellants that Section
81 of the Act permits the Authority to delegate such powers and functions
to any member of the Authority which are mainly administrative or clerical, and
cannot possibly encompass any of the core functions which are to be discharged
by the Authority, the judicial functions are non-delegable, as these are the
core functions of the Authority. The submission may not hold good for the
reason that the power to be exercised by the Authority in deciding complaints
under Section 31 of the Act is quasi-judicial in nature which is
delegable provided there is a provision in the statute. As already
observed, Section 81 of the Act empowers the Authority
to delegate its power and functions to any of its members, by general or
special order.”
26.
Lastly, the practical impact of not allowing delegation would be to overload
the STA with routine functions, potentially causing undue delays and
inefficiencies in the permit-issuance process. Such delays could disrupt the
balance of public transport service delivery, which the Legislature clearly
sought to improve by liberalizing the regime for non-stage carriage permits. In
this light, the delegation of routine permit-granting powers is not only
legally permissible but is also necessary to meet the practical demands of an
evolving transport sector.
27.
In view of the above analysis, we conclude that the power of the STA to
delegate the issuance of contract carriage, special, tourist, and temporary
permits to its Secretary is fully supported by the statutory provisions
of Section 68(5) of the MV Act, and Rule 56(1)(d) of the KMV Rules,
1989. The delegation is a rational and necessary administrative measure that
facilitates prompt and efficient processing of permit applications without
undermining the oversight function of the STA.
Consequently,
we reject the Respondents’ arguments and hold that the High Court’s reasoning
on the non- delegability of permit-granting power is flawed. The power to
delegate, as provided by law, remains intact, and any decision to the contrary
is unsustainable in light of both legislative intent and practical necessity.
28.
In view of the discussions and analysis above, we hold that:
(a) Section 3 of the
Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003,
which repeals the Karnataka Contract Carriages (Acquisition) Act, 1976, is
constitutional.
(b) The State
Transport Authority (STA) possesses the power to delegate its functions
under Section 68(5) of the MV Act, as expressly provided by the
statute and further clarified by Rule 56(1)(d) of the KMV Rules.
29.
Consequently, we direct that the appeals of the respondent corporation (KSRTC)
are dismissed, while the appeals filed by the private bus operators and
the Karnataka State Road Transport Authority are allowed.
30.
The impugned orders of the High Court that denied the delegation power of the
STA are set aside, and it is confirmed that the Secretary of the STA is
empowered to grant non-stage carriage permits (including contract carriage,
special, tourist, and temporary permits) in accordance with Section
68(5) of the MV Act and Rule 56(1)(d) of the KMV Rules, subject to the
limitations and conditions prescribed therein.
31.
The appropriate authorities are directed to take all necessary measures to
implement the above findings and ensure that the delegation of permit- granting
power is exercised in a manner consistent with the statutory provisions and the
objectives of efficient public transport administration.
32.
All pending applications are disposed of.
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