Vijay Kumar Sharma & Ors. Vs. State of Karnataka & Ors.
EmailAppeal: Writ Petition No. 723 of 1989
Petitioner: Vijay Kumar Sharma & Ors.
Respondent: State of Karnataka & Ors.
Apeal: Writ Petition No. 723 of 1989
Judges: RANGANATH MISRA, P.B. SAWANT & K. RAMASWAMY, JJ.
Date of Judgment: Feb 27, 1990
Appearances:
Mr.G. Ramaswamy, Additional Solicitor Genneral (N.P.), Mr.F.S.Nariman, Mr.G.L. Sanghi, Senior Advocates, Mr.G. Prabhakar, Mr.M.Rangaswamy, Mr.N.D.B.Raju, Ms.C.K. Sucharita, Mr.S.K. Agnihotri, Mr.P.R. Ramashesh, Mr.K.R. Nagaraja and Ms.Anita Sanghi, Advocates with them for the appearing parties.
Head Note:
MOTOR VEHICLES
Karnataka Contract Carriage (Acquisition) Act (Karnataka Act 21 of 1976) :
Sections 14 and 20 – Whether the Motor Vehicles Act, 1988 impliedly repealed the Karnataka Act? – Held no – There is repugnancy in the provisions of sections 14 and 20 of the Karnataka Act and sections 74 and 80 of MV Act, 1988 – K. Ramaswamy, J. dissenting with the majority decision of Ranganath Misra and P.B. Sawant, JJ. – Motor Vehicles Act, 1988 (59 of 1988), sections 73, 74 and 80 – Constitution of India, Article 254.
Held:
Per Ranganath Misra, J. (Concurring with Sawant, J.)
The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act. Nor does it in s.73 or s.74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted. Section 80 of the 1988 Act does contain a liberalised provision in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in s.20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision. Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the field. Since ss.73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking Art.254 of the Constitution. A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act. (Paras 17 and 18)
Per Sawant, J.
It is … not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field. We see no such provision in the Act nor was any pointed out to us. The provisions with regard to the grant of permits under both the old and the new Act are the same. In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karnataka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof. The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the concurrent list to regulate the operation of the motor vehicles. The objects and the subject matters of the two enactments are materially different. Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations. …. I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988 … I am of the view that there is no repugnancy in the provisions of Sections 14 and 20 of the Karnataka Act and Sections 74 and 80 of the MV Act 1988. The petitions must therefore fail and are hereby dismissed with costs. (Paras 31, 32, 36 and 54)
Per K. Ramaswamy, J. (Dissenting)
… the existence of two sets of provisions in the Act 59 of 1988 and Acquisition Act 21 of 1976 is sufficient to produce conflicting results in their operation in the same occupied field. The two sets of provisions run on collision course, though an applicant may waive to make an application for a permit. Thereby, there exists the operational incompatibility and irreconcilability of the two sets of provisions. Sections 14(1) and 20(3) of the acquisition Act are repugnant and inconsistent to ss. 73, 74 and 80 of the Act. By operation of proviso to Art. 254(2) of the Constitution, the embargo created by ss. 14(1) and 20(3) of the Acquisition Act (21 of 1976) to make or invite an application and injunction issued to Regional Transport Authority prohibiting to grant contract carriage permit to anyone except to S.T.U., Karnataka within the State of Karnataka became void. For the applicability of the principle that special law prevails over the general law, the special law must be a valid law in operation. Voidity of law obliterates it from the statute from its very inception. In view of the finding that ss. 14(1) and 20(3) are void the contention that the special law prevails over the general law is without substance. (Paras 92 and 93)
Cases Reffered:
1. Secretary, R.T.A. Bangalore v. P.D. Sharma, AIR 1989 SC 509.
2. Ratan Lal Adukia v. Union of India, JT 1989 SC 336 = 1989 (3) SCR 537.
3. T.Barai v. Henry An Hoe & Anr., 1983 (1) SCR 905.
4. Hoechst Pharmaceuticals Ltd. & Anr. v. State of Bihar & Ors., 1983 (3) SCR 130.
5. M.Karunanidhi v. Union of India, 1979 (3) SCR 254.
6. Justiniano Augusto De Peidada Barreto v. Antonia Vicente De Fonseca & Ors. 1979 (3) SCR 494.
7. State Of Karnataka & Anr. v. Shri Ranganatha Reddy & Anr., 1978 (1) SCR 641.
8. Kerala State Electricity Board v. Indian Aluminium Company, 1976 (1) SCR 552.
9. Bar Council of Uttar Pradesh v. State of U.P & Anr., 1973 (2) SCR 1073.
10. State of J & K v. M.S. Farooqi, 1972 (3) SCR 881.
11. Union of India v. H.S. Dhillon, 1972 (2) SCR 33.
12. Harakchand Ratanchand Banthia v. Union of India, 1970 (1) SCR 479.
13. State of Assam v. Horizon Union 1967 (1) SCR 484.
14. State of Orissa v. M.A. Tulloch & Co., 1964 (4) SCR 461.
15. Deep Chand v. State of Uttar Pradesh & Ors. 1959 (2) Suppl. SCR 8.
16. Atiabari Tea Co. Ltd. v. State of Assam, 1961 (1) SCR 809.
17. Prem Nath Kaul v. State of J & K, 1959 (2) Supp. SCR 273.
18. A.S. Krishna v. Madras State, 1957 SCR 399.
19. Tika Ramji & Ors.etc. v. State of U.P. & Ors., 1956 SCR 393.
20. Zaverbhai Amaidas v. State of Bombay, 1955 (1) SCR 799.
21. State of Bombay v. F.N. Balsara, 1951 SCR 682.
22. Prafulla Kumar v. Bank of Commerce, Khulna, AIR 1947 PC 60.
23. Meghraj & Ors. v. Allaharakhiya & Ors., (29) AIR 1942 FC 27.
24. Subrahmanyam Chettiar v. Muttuswami Goundan, AIR 1941 F.C. 47.
25. G.P.Stewart v. B.K. Roy Choudhary, AIR 1939 Cal. 628.
2. Ratan Lal Adukia v. Union of India, JT 1989 SC 336 = 1989 (3) SCR 537.
3. T.Barai v. Henry An Hoe & Anr., 1983 (1) SCR 905.
4. Hoechst Pharmaceuticals Ltd. & Anr. v. State of Bihar & Ors., 1983 (3) SCR 130.
5. M.Karunanidhi v. Union of India, 1979 (3) SCR 254.
6. Justiniano Augusto De Peidada Barreto v. Antonia Vicente De Fonseca & Ors. 1979 (3) SCR 494.
7. State Of Karnataka & Anr. v. Shri Ranganatha Reddy & Anr., 1978 (1) SCR 641.
8. Kerala State Electricity Board v. Indian Aluminium Company, 1976 (1) SCR 552.
9. Bar Council of Uttar Pradesh v. State of U.P & Anr., 1973 (2) SCR 1073.
10. State of J & K v. M.S. Farooqi, 1972 (3) SCR 881.
11. Union of India v. H.S. Dhillon, 1972 (2) SCR 33.
12. Harakchand Ratanchand Banthia v. Union of India, 1970 (1) SCR 479.
13. State of Assam v. Horizon Union 1967 (1) SCR 484.
14. State of Orissa v. M.A. Tulloch & Co., 1964 (4) SCR 461.
15. Deep Chand v. State of Uttar Pradesh & Ors. 1959 (2) Suppl. SCR 8.
16. Atiabari Tea Co. Ltd. v. State of Assam, 1961 (1) SCR 809.
17. Prem Nath Kaul v. State of J & K, 1959 (2) Supp. SCR 273.
18. A.S. Krishna v. Madras State, 1957 SCR 399.
19. Tika Ramji & Ors.etc. v. State of U.P. & Ors., 1956 SCR 393.
20. Zaverbhai Amaidas v. State of Bombay, 1955 (1) SCR 799.
21. State of Bombay v. F.N. Balsara, 1951 SCR 682.
22. Prafulla Kumar v. Bank of Commerce, Khulna, AIR 1947 PC 60.
23. Meghraj & Ors. v. Allaharakhiya & Ors., (29) AIR 1942 FC 27.
24. Subrahmanyam Chettiar v. Muttuswami Goundan, AIR 1941 F.C. 47.
25. G.P.Stewart v. B.K. Roy Choudhary, AIR 1939 Cal. 628.
Foreign Cases Referred:
1. Blackley v. Devondale Cream (Vic.) Pct. Ltd. 1968 (117) CLR 253.
2. O’sullivan v. Noarlunga Meat Co. Ltd., 1954 (92) CLR 565.
3. Wenn v. Attorney General (Victoria) 1948 (77) CLR 84.
4. Governor General in Council v. The Reliegh Investment Co. Ltd., 1944 FCR 229.
5. Colvin v. Bradley Bros. Pvt. Ltd. 1943 (68) CLR 151.
6. Shyamakant Lal v. Rambhajan Singh, 1939 FCR 193.
7. Re Ex parte Maclean, 1930 (43) CLR 472.
8. Clyde Engineering Co. v. Cowburn, 1926 (37) CLR 466.
9. Hume v. Palmer, 1926 (38) CLR 441.
10. Brisbane Licensing Court, 1920 (28) CLR 23.
11. Good win v. Phillips, (1908) 7 CKR 16.
12. Attorney General for Ontario v. Attorney General for the Dominion, 1896 AC 348.
13. The Great Central Gas Consumers Co. v. Clarke,(1863) 143 ER 331.
14. Daw v. The Metropolitan Board of Works, (1862) 142 ER 1104.
Books, Treatises and Articles Referred:
Crawford : Statutory Construction, p. 633.
Sutherland : Statutory Construction, Vol.3, 3rd Edn. p.486.
Nicholas : Australian Constitution, 2nd Edition, p.303.
JUDGEMENT:
RANGANATH MISRA, J. :
1. I have the benefit of reading the judgment prepared by my esteemed brethren Sawant and K. Ramaswamy, JJ. Brother Sawant had taken the view that s.20 of the Karnataka Act has not become void with the enforcement of the Motor Vehicles Act, 1988, while Brother K.Ramaswamy has come to the contrary conclusion. Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments I have found additional reasons to support the conclusion of Sawant, J., I proceed to indicate the same in my separate judgment.
2. These applications under Article 32 of the Constitution by a group of disgruntled applicants for contract carriage permits call in question action of the concerned transport authorities in not entertaining their applications under the provisions of the Motor Vehicles Act, 1988.
3. Motor Vehicles Act (4 of 1939) made provision for grant of contract carriage permits. The Karnataka Contract Carriage (Acquisition) Act (Karnataka Act 21 of 1976) received assent of the President on 11th of March, 1976, but was declared to have come into force from 30th of January, 1976, when the corresponding Karnataka Ordinance 7 of 1976 had come into force. The long title of the Act indicated that it was an Act to provide for the acquisition of contract carriages and for matters incidental, ancillary or subservient thereto, and the preamble stated:
“Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a matter highly detrimental and prejudicial to public interest;
And whereas with a view to prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
And whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidental, ancillary or subservient thereto…..”
Section 2 contains the declaration to the following effect:
“It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles speci fied in clauses (b) and (c) of Article 39 of the Constitution of India and the acquisition therefor of the contract carriages and other property referred to in section 4.”
4. Under s.4 contract carriages owned or operated by contract carriage operators along with the respective permits and/or certificates of registration, as the case may be, vested in the State absolutely free from encumbrances, and compensation for such acquisition was provided under the scheme of the Act. Section 14 prohibited application for any permit or fresh permit or renewal of existing permits for running of any contract carriage in the State by any private operator and all pending proceedings in relation to grant or renewal abated. Consequential provisions were made in ss.15 and 16 of the Act. Section 20 gave the Corporation the exclusive privilege of running contract carriages within the State to the exclusion of any provision under the 1939 Act.
5. The vires of the Act was the subject-matter of the decision of this Court in a group of appeals in the case of the State of Karnataka & Anr. v. Shri Ranganatha Reddy & Anr. (1978) 1 SCR 641. A Seven-Judge Bench upheld the validity of the statute holding that the impugned statute was an ‘acquisition Act’ within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution. The Court took note of the fact that even though it may have had some incidental impact on inter-State trade or commerce it did not suffer from any lacuna on that count. Since the Act had been reserved for Presidential assent, to the extent s.20 made provisions contrary to those in the Motor Vehicles Act of 1939, was taken to be valid under Art. 254(2) of the Constitution.
6. The Motor Vehicles Act (59 of 1988) being a Parliamentary legislation was brought into force with effect from 1.7.1989. Under s.1(2), the Act extended to the whole of India and, therefore, the Act became applicable to the State of Karnataka by the notification appointing the date of commencement of the Act.
7. The 1988 Act has admittedly liberalised the provisions relating to grant of permits of every class including contract carriages. Sections 73, 74 and 80 contain the relevant provisions in this regard. While s.73 provides for an application for such permit, s.74 contains the procedure for the consideration of the grant and s.80 contains a general provision that the transport authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under the Act. It is the contention of the petitioners that with the enforcement of the Motor Vehicles Act of 1988 as a piece of central legislation, the provisions of s.20 of the Karnataka Act became void to the extent the State law was inconsistent with the provisions of the 1988 Act and, therefore, by operation of the provisions contained in Art.254 of the Constitution, s.20 stood abrogated and the scheme of the 1988 Act became operative. The applications of the petitioners for grant of contract carriage permits were maintainable and should have been entertained and disposed of in accordance with the provisions of the 1988 Act.
8. It is the stand of the respondents, in particular of the Karnataka State Transport Undertaking, that the State Act is a legislation under a different entry and was not on the same subject. Therefore, the matter did not come within the ambit of Art.254 of the Constitution. The State Act continues to hold the field and the transport authorities had rightly refused to entertain the petitioners’ applications.
9. The question for consideration is : Whether Art. 254(1) of the Constitution applies to the situation in hand and whether s.20 of the Karnataka Act being inconsistent with the provisions of ss.74, 74 and 80 of the 1988 Motor Vehicles Act became void. It would be convenient to extract the provisions of Art. 254 of the Constitution at this stage and recount the background in which such provision was warranted. It is the common case of the parties that with the introduction of federalism and distribution of legislative powers and accepting a Concurrent List wherein in regard to specified subjects the Federal and the Federating State Legislatures had power to legislate, a provision of rationalisation became necessary. Section 107 of the Government of India Act, 1935, contained the provision to deal with such a situation. The Constituent Assembly accepted a similar mechanism and added a proviso to clause (2) of Art. 254 to meet the difficulties experienced in the intervening years. The Article reads thus:
“254. (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the mat ters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.”
10. Though for some time there was difference of judicial opinion as to in what situation Art. 254 applies, decisions of this Court by overruling the contrary opinion have now concluded the position that the question of repugnancy can arise only with reference to a legislation falling under the Concurrent List: Bar Council of Uttar Pradesh v. State of U.P. & Anr. (1973) 2 SCR 1073 and Kerala State Electricity Board v. Indian Aluminium Company ((1976) 1 SCR 552)
11. This Court in Deep Chand v. State of Uttar Pradesh & Ors. ((1959) 2 Suppl. SCR 8), T.Barai v. Henry An Hoe & Anr. ((1983) 1 SCR 905) and Hoechst Pharmaceuticals Ltd. & Anr. v. State of Bihar & Ors. ((1983) 3 SCR 130) has laid down that cl.(1) of Art.254 lays down the general rule and cl.(2) is an exemption thereto; the proviso qualifies the exception. Therefore, while interpreting Art.254 this position has to be kept in view. The situation of the 1939 Motor Vehicles Act being existing law and the Karnataka Act containing provision repugnant to that Act with Presidential assent for the State Act squarely came within the ambit of cl.(2) of the Article. That is how the State Act had overriding effect.
12. The consideration of the present question has to be within the ambit of cl.(1) as the State law is the earlier legislation and the Parliamentary Act of 1989 came later and it is contended that the State legislation has provisions repugnant to provisions made in the 1988 Act. There can be no controversy that if there is repugnancy, the Parliamentary legislation has to prevail and the law made by the State Legislature to the extent of repugnancy becomes void.
13. In cl.(1) of Art. 254 it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Concurrent List. The seven-Judge Bench examining the vires of the Karnataka Act did hold that the State Act was an Act for acquisition and came within Entry 42 of the Concurrent List. That position is not disputed before us. There is unanimity at the Bar that the Motor Vehicles Act is a legislation coming within Entry 35 of the Concurrent List. Therefore, the Acquisition Act and the 1988 Act as such do not relate to one common head of legislation enumerated in the Concurrent List and the State Act and the Parliamentary statute deal with different matters of legislation.
14. The language of cl.(2) is also similar though applicable in a different situation. Apparently in one sense both the clauses operate on a similar level though in dissimilar context. In cl.(2) what is relevant is the words : ‘With respect to that matter’. A Constitution Bench of this Court in Zaverbhai Amaidas v. State of Bombay ((1955) 1 SCR 799) emphasised that aspect. Venkatarama Ayyar, J. pointed out:
“The important thing to consider with reference to this provi sion is whether the legislation is ‘in respect of the same matter’. If the later legislation deals not with the matters which formed the subject of the earlier legislation but with other and distinct matters though of a cognate and allied character, then Art. 254(2) will have no application.”
15. A lot of light relevant to the aspect under consideration is available from another decision of a Constitution Bench of this Court: (M.Karunanidhi v. Union of India ((1979) 3 SCR 254). At p.263 of the Reports, it has been said:
“It would be seen that so far as clause (1) of Article 254 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect of one of the matters enumerated in the Concurrent List, then, subject to the provi sions of clause (2), the State law would be void to the extent of the repugnancy. This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act. In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parliament and the State Legis latures. First, regarding the matters contained in List I, i.e., the Union List to the Seventh Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is con cerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances:-
1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent (Emphasis added) and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
2. Where, however, a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254.
3. Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.
4. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only. Such a state of affairs will exist only until parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254.”
16. In Deep Chand v. State of Uttar Pradesh, supra, this Court had pointed out that repugnancy between two statutes would arise if there was direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupied the same field.
17. It has already been stated that the State Act intended to eliminate private operators from the State in regard to contract carriages acquired under the existing permits, vehicles and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in s.20 for excluding the private operators. The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act. Nor does it in s.73 or s.74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted. Section 80 of the 1988 Act does contain a liberalised provision in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in s.20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision.
18. Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the field. Since ss.73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking Art.254 of the Constitution. A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act.
19. A number of precedents have been cited at the hearing and those have been examined and even some which were not referred to at the Bar. There is no clear authority in support of the stand of the petitioners – where the State law is under one head of legislation in the Concurrent List; the subsequent Parliamentary legislation is under another head of legislation in the same List and in the working of the two it is said to give rise to a question of repugnancy.
20. The State Act had done away with the private operators qua contract carriages within the State. It is true that the 1988 Act is applicable to the whole of India and, therefore, is also applicable to the State of Karnataka in the absence of exclusion of the State of Karnataka from its operation. But as has been pointed out already, there is no direct inconsistency between the two and on the facts placed in the case there is no necessary invitation to the application of cl.(1) of Art.254 of the Constitution.
21. The writ petitions fail and are dismissed.
SAWANT, J. :
22. This group of petitions raises a common question of law viz.: whether the Motor Vehicles Act, 1988 (hereinafter referred to as the MV Act 1988) has impliedly repealed the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the Karnataka Act).
23. The petitioners claim a declaration that the provision of Sec.14 and 20 of the Karnataka Act are invalid because of their repugnancy with the provisions of the MV Act, 1988, and a direction to respondent nos. 2 and 3, namely the Karnataka State Transport Authority and the Karnataka Regional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sec.74 and 80 of the MV Act, 1988, without reference to the provisions of the Karnataka Act. The precise question that falls for consideration, therefore, is whether there is a repugnancy between the two legislations.
24. The Karnataka Act, as its title shows, was enacted to provide for the acquisition of contract carriages and for matters incidental, ancillary and subservient thereto. It was enacted under Entry 42 of the Concurrent List read with Article 31 of the Constitution, in furtherance of Article 39(b) and (c) thereof. This is evident from the preamble, and Section 2 of the Act. The preamble states that since the contract carriages and certain other categories of public service vehicles were being operated in the State in a manner highly detrimental and prejudicial to public interest, it was necessary to prevent the misuse, and to provide better facility for the transport of the passengers by road. It was also necessary to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community were so distributed as best to subserve the common good and that the operation of the economic system did not result in the concentration of wealth and means of production to the common detriment. To effectuate the said intention it was considered necessary to enact the legislation. Section 2 of the Act makes a declaration in the following words:
“It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles speci fied in Clauses (b) and (c) of Article 39 of the Constitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4.”
25. Under Section 4 of the Act every contract carriage owned or operated by contract carriage operator along with the permit or the certificate of registration or both as the case may be, vested in the State Government absolutely and free from all encumbrances. Further, all rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, instruments, machinery, tools, plants, apparatus and other equipments used for the maintenancy, repair of, or otherwise in connection with the service of the contract carriage as the State Government may specify in that behalf and all books of accounts, registers, records and all other documents of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose. Section 6 provided for payment of compensation for the acquisition of all the said property.
26. Since the avowed object of the Act was two fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy underlying Clauses (b) and (c) of Article 39 of the Constitution, it was also necessary to prevent the issue of fresh permits or renewal of the existing permits for running the contract carriages in the State to any private individual. Hence, Section 14 provided for a prohibition of the issue of fresh permit or renewal of the existing permit to any individual or the transfer of such permit to anyone except to the State Government or the Corporation which it may establish under the Karnataka State Road Transport Corporation Act, 1950. To make an alternative arrangement for running the contract carriages and to prevent both the misuse of the permits as well as concentration of wealth in the hands of a few individuals, Section 20 of the Act provided that all contract carriage-permits granted or renewed till then would stand cancelled and the Corporation alone would be entitled to the grant of renewal of the said permits to the exclusion of all other persons, and that applications from persons other than the Corporation for the grant of such permit shall not be entertained.
27. In State of Karnataka & Anr. Etc. Vs. Shri Ranganatha Reddy & Anr. Etc. 1978 (1) SCR 641 this Court upheld the validity of the said Act holding, among other things, that the Act was for acquisition of property and was in the public interest and for a public purpose. The Act, according to the Court, had nationalised the contract transport service in the State and that was also for a public purpose as declared in the Act. It was also observed that if Articles 38 and 39 are to be given effect to, then the State has progressively to assume the predominant and direct responsibility for setting up new industrial undertakings which would also include development of transport facilities. The State has also to become agency for planned national development, and the socialistic pattern of society as the national objective required that public utility services should be in the public sector. The acquisition of road transport undertakings by the State, therefore, undoubtedly served the public purpose.
28. It is thus clear from the provisions of the Karnataka Act that the whole object of the Act is to nationalise the contract carriage service in the State with a view to put an end to the abuse of the contract carriage services by the private operators and to provide better transport facilities to the public, and also to prevent concentration of the wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all. To secure the objective of the Act, it was also necessary to prohibit the grant of the contract carriage permits to private individuals and to reserve them exclusively to the State Undertaking which was done by Sections 14 and 20 of the Act. Unlike the MV Act 1988, which is admittedly enacted by the Parliament under Entry 35 of the Concurrent List, to regulate the operation of the motor vehicles, the object of the Karnataka Act is not only the regulation of the operation of the motor vehicles. Nor is its object merely to prevent the private owners from operating their vehicles with the exclusive privilege of such operation being reserved in favour of the State or the State Undertaking. For if that were the only object, the same could have been achieved by the Transport Undertakings of the State following the special provisions relating to State Transport Undertakings in Chapter IV-A of the Motor Vehicles Act, 1939 which was in operation when the Karnataka Act was brought into force. The very fact that instead, the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legislature in enacting it was materially different. This is also obvious from the various provisions of the enactment pointed out above.
29. It is for this reason that the contention advanced by the petitioners that the object of the Karnataka Act and that of the MV Act, 1988 is the same and that both of them occupy the same field, cannot be accepted. A comparison of the provisions of the MV Act, 1939 (Old Act) and MV Act, 1988 (New Act) further shows that the latter has merely replaced the former. All that it has done is to update, simplify and rationalize the law on the subject. For this purpose it has made important provisions in the following matters, namely:
“a) rationalisation of certain definitions with additions of certain new definitions of new types of vehicles;
b) stricter procedures relating to grant of drawing licences and the period of validity thereof;
c) laying down of standards for the components and parts of motor vehicles;
d) standards for anti-pollution control devices;
e) provision for issuing fitness certificates of vehicles also by the authorised testing stations;
f) enabling provision for updating the system of registration marks;
g) liberalised schemes for grant of stage carriage permits on non-nationalised routes, all India Tourist permits and also national permits for goods carriages;
h), i), j), k), l), ……”
30. The special provisions relating to the State Transport Undertakings which are contained in Chapter VI of the new Act are pari-materia with those of Chapter IV-A of the old Act, with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself. There is no difference in the legal consequences of the schemes under the two enactments. Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit. No acquisition of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnataka Act.
31. It is also not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field. We see no such provision in the Act nor was any pointed out to us. The provisions with regard to the grant of permits under both the old and the new Act are the same. In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act.
32. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karnataka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof. The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the concurrent list to regulate the operation of the motor vehicles. The objects and the subject matters of the two enactments are materially different. Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations.
33. Shri Nariman, the learned counsel for the petitioners however, contended that the provisions of Section 14 and 20 of the Karnataka Act were in direct conflict with the provisions of Sections 74 and 80(2) of the MV Act 1988. According to him while the Regional Transport Authority (RTA) is enjoined by the provisions of Section 74 read with Section 80(2) of the MV Act 1988, ordinarily not to refuse to grant an application for permit of any kind, the provisions of Section 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from entertaining or granting, application for running any contract carriage in the State. Thus there is a direct conflict between the two legislations, and since the MV Act 1988 is a later legislation, operating in the same area, it should be deemed to have impliedly repealed the provisions of Section 14 and 20 of the Karnataka Act, even if the latter Act had received the assent of the President. This is so because of the proviso to sub-clause (2) of Article 254 of the Constitution.
34. This contention proceeds on the footing that the two legislations occupy the same field. As has been pointed out earlier, the objects of the two legislations are materially different. The provisions of Sections 51 and 57 of the old Act further correspond to provisions of Section 74 and 80 of the new Act. The Karnataka Act had received the assent of the President in spite of the provisions of Sections 51 and 57 of the old Act. The assent of the President, further as stated by the respondents, was taken by way of abundant precaution, although the subject matters of the two Acts were different. The provisions of Sections 14 and 20 of the Karnataka Act were incidental and necessary to carry out the main object of the said Act. Without the said provisions, the object of the said Act would have been frustrated. In the case of State of Karnataka & Anr. Etc. Vs. Ranganatha Reddy & Anr. Etc. (supra) while repelling the contention that there was a legislative encroachment by the Karnataka Act because it impinged on the subject of Inter-State Trade & Commerce in the Union List as it provided also for acquisition of transport carriages running on inter-state routes, this Court in para 32 of the Judgment has observed as follows:
“……It (the Karnataka Act) is not an Act which deals with any Inter-State trade and Commerce. Even assuming for the sake of argument that carriage of passengers from one State to the other is in one sense a part of the Inter-State Trade and Commerce, the impugned Act is not one which seeks to legislate in regard to the said topic. Primarily and almost wholly it is an Act to provide for the acquisition of contract carriages, the Intra-State permits and the other properties situated in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental encroachment on the topic of inter State trade and commerce, even assuming there is some, cannot invalidate the Act. The MV Act 1939 was enacted under Entry 20 of List III of Schedule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution. The subject being in the Concur rent List and the Act having received the assent of the Presi dent, even the repugnancy, if any between the Act and the Motor Vehicles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List III deals with acquisition of prop erty. The State has enacted the Act mainly under this entry……” (Emphasis supplied)
35. According to me these observations should put an end to any controversy on the subject, namely, whether the two Legislations are enacted under two different entries in the Concurrent List, and whether they occupy different areas or not.
36. I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988. Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the MV Act 1939) that Chapter VI relating to the special provisions about the State Transport Undertaking and the rules and orders made thereunder, shall have effect notwithstanding anything inconsistent therewith contained in Chapter V or any other law for the time being in force or in any instrument having effect by virtue of any such law. Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V. This means that when under Chapter VI, a scheme is prepared by the State Govt. entrusting the contract carriage services in relation to any area or route or portion thereof, to a State Transport Undertaking to the exclusion – complete or partial of other persons, the provisions of Sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under Section 80 nor can such permits be granted by the Transport Authority. In other words, the MV Act 1988 also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised. Hence it is not correct to say that there is a conflict between the provisions of the two Acts.
37. It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitution, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legislation are in conflict with some of the provisions of the Central legislation, the conflicting provisions of the State legislation will be invalid. In support of this contention, reliance was placed on two decisions one of the Federal Court in the case of Meghraj & Ors. Vs. Allahrakhiya & Ors. (29) AIR 1942 SC 27 and the other of the Privy Council reported in AIR (34) 1947 PC 722 confirming the former.
38. The Federal Court in the above decision has observed that when a provincial Act is objected to as contravening not Section 100 but Section 107(1) the Govt. of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise. In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code. The Court held that there was no repugnancy between the legislations. But while holding so, the Court made a one sentence observation as follows: “In the judgment of the High Court there is some discussion of the question of the “pith and substance” of the Act; but that question does not arise as objection is taken not under Section 100 of the Constitution Act but Sec.107.” There is no discussion on the point. The arguments, if any advanced on the question are neither reproduced nor dealt with. The observation further was not necessary for the decision in that case, since as is pointed out above, the Court had held that there was no repugnancy between the two statutes since they covered two different subject matters. Hence the issue as to whether the impugned Punjab Restitution of Mortgage Lands Act was valid because the pith and substance of the Act covered an area different from the one covered by the Contract Act and the Civil Procedure Code, did not fall for consideration before the Court. What is more, when the matter went in appeal before the Privy Council, the said point was not even remotely referred to, and I find no observation in the judgment either confirming or dissenting from, the said observations. This being the case the said observations cannot be regarded as more than general in nature. They are not even an obiter-dicta much less are they the ratio decidendi of the case. Hence the said observations do not have a binding effect.
39. Even otherwise, I am of the view that not to apply the theory of pith and substance when the repugnancy between the two statutes is to be considered under Article 254 of the Constitution, would be illogical when the same doctrine is applied while considering whether there is an encroachment by the Union or the State legislature or a subject exclusively reserved for the other. When the legislative encroachment is under consideration the doctrine of pith and substance comes to the aid to validate a legislation which would otherwise be invalid for the very want of legislative competence. When the repugnancy between the two legislations is under consideration, what is in issue is whether the provision of the State enactment though otherwise constitutionally valid, has lost its validity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter. If it is open to resolve the conflict between two entries in different Lists, viz. the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legislations, there is no reason why the repugnancy between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same touch-stone. What is to be ascertained in each case is whether the legislations are on the same subject matter or not. In both cases the cause of conflict is the apparent identity of the subject matters. The tests for resolving it therefore cannot be different.
1. I have the benefit of reading the judgment prepared by my esteemed brethren Sawant and K. Ramaswamy, JJ. Brother Sawant had taken the view that s.20 of the Karnataka Act has not become void with the enforcement of the Motor Vehicles Act, 1988, while Brother K.Ramaswamy has come to the contrary conclusion. Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments I have found additional reasons to support the conclusion of Sawant, J., I proceed to indicate the same in my separate judgment.
2. These applications under Article 32 of the Constitution by a group of disgruntled applicants for contract carriage permits call in question action of the concerned transport authorities in not entertaining their applications under the provisions of the Motor Vehicles Act, 1988.
3. Motor Vehicles Act (4 of 1939) made provision for grant of contract carriage permits. The Karnataka Contract Carriage (Acquisition) Act (Karnataka Act 21 of 1976) received assent of the President on 11th of March, 1976, but was declared to have come into force from 30th of January, 1976, when the corresponding Karnataka Ordinance 7 of 1976 had come into force. The long title of the Act indicated that it was an Act to provide for the acquisition of contract carriages and for matters incidental, ancillary or subservient thereto, and the preamble stated:
“Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a matter highly detrimental and prejudicial to public interest;
And whereas with a view to prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
And whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidental, ancillary or subservient thereto…..”
Section 2 contains the declaration to the following effect:
“It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles speci fied in clauses (b) and (c) of Article 39 of the Constitution of India and the acquisition therefor of the contract carriages and other property referred to in section 4.”
4. Under s.4 contract carriages owned or operated by contract carriage operators along with the respective permits and/or certificates of registration, as the case may be, vested in the State absolutely free from encumbrances, and compensation for such acquisition was provided under the scheme of the Act. Section 14 prohibited application for any permit or fresh permit or renewal of existing permits for running of any contract carriage in the State by any private operator and all pending proceedings in relation to grant or renewal abated. Consequential provisions were made in ss.15 and 16 of the Act. Section 20 gave the Corporation the exclusive privilege of running contract carriages within the State to the exclusion of any provision under the 1939 Act.
5. The vires of the Act was the subject-matter of the decision of this Court in a group of appeals in the case of the State of Karnataka & Anr. v. Shri Ranganatha Reddy & Anr. (1978) 1 SCR 641. A Seven-Judge Bench upheld the validity of the statute holding that the impugned statute was an ‘acquisition Act’ within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution. The Court took note of the fact that even though it may have had some incidental impact on inter-State trade or commerce it did not suffer from any lacuna on that count. Since the Act had been reserved for Presidential assent, to the extent s.20 made provisions contrary to those in the Motor Vehicles Act of 1939, was taken to be valid under Art. 254(2) of the Constitution.
6. The Motor Vehicles Act (59 of 1988) being a Parliamentary legislation was brought into force with effect from 1.7.1989. Under s.1(2), the Act extended to the whole of India and, therefore, the Act became applicable to the State of Karnataka by the notification appointing the date of commencement of the Act.
7. The 1988 Act has admittedly liberalised the provisions relating to grant of permits of every class including contract carriages. Sections 73, 74 and 80 contain the relevant provisions in this regard. While s.73 provides for an application for such permit, s.74 contains the procedure for the consideration of the grant and s.80 contains a general provision that the transport authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under the Act. It is the contention of the petitioners that with the enforcement of the Motor Vehicles Act of 1988 as a piece of central legislation, the provisions of s.20 of the Karnataka Act became void to the extent the State law was inconsistent with the provisions of the 1988 Act and, therefore, by operation of the provisions contained in Art.254 of the Constitution, s.20 stood abrogated and the scheme of the 1988 Act became operative. The applications of the petitioners for grant of contract carriage permits were maintainable and should have been entertained and disposed of in accordance with the provisions of the 1988 Act.
8. It is the stand of the respondents, in particular of the Karnataka State Transport Undertaking, that the State Act is a legislation under a different entry and was not on the same subject. Therefore, the matter did not come within the ambit of Art.254 of the Constitution. The State Act continues to hold the field and the transport authorities had rightly refused to entertain the petitioners’ applications.
9. The question for consideration is : Whether Art. 254(1) of the Constitution applies to the situation in hand and whether s.20 of the Karnataka Act being inconsistent with the provisions of ss.74, 74 and 80 of the 1988 Motor Vehicles Act became void. It would be convenient to extract the provisions of Art. 254 of the Constitution at this stage and recount the background in which such provision was warranted. It is the common case of the parties that with the introduction of federalism and distribution of legislative powers and accepting a Concurrent List wherein in regard to specified subjects the Federal and the Federating State Legislatures had power to legislate, a provision of rationalisation became necessary. Section 107 of the Government of India Act, 1935, contained the provision to deal with such a situation. The Constituent Assembly accepted a similar mechanism and added a proviso to clause (2) of Art. 254 to meet the difficulties experienced in the intervening years. The Article reads thus:
“254. (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the mat ters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.”
10. Though for some time there was difference of judicial opinion as to in what situation Art. 254 applies, decisions of this Court by overruling the contrary opinion have now concluded the position that the question of repugnancy can arise only with reference to a legislation falling under the Concurrent List: Bar Council of Uttar Pradesh v. State of U.P. & Anr. (1973) 2 SCR 1073 and Kerala State Electricity Board v. Indian Aluminium Company ((1976) 1 SCR 552)
11. This Court in Deep Chand v. State of Uttar Pradesh & Ors. ((1959) 2 Suppl. SCR 8), T.Barai v. Henry An Hoe & Anr. ((1983) 1 SCR 905) and Hoechst Pharmaceuticals Ltd. & Anr. v. State of Bihar & Ors. ((1983) 3 SCR 130) has laid down that cl.(1) of Art.254 lays down the general rule and cl.(2) is an exemption thereto; the proviso qualifies the exception. Therefore, while interpreting Art.254 this position has to be kept in view. The situation of the 1939 Motor Vehicles Act being existing law and the Karnataka Act containing provision repugnant to that Act with Presidential assent for the State Act squarely came within the ambit of cl.(2) of the Article. That is how the State Act had overriding effect.
12. The consideration of the present question has to be within the ambit of cl.(1) as the State law is the earlier legislation and the Parliamentary Act of 1989 came later and it is contended that the State legislation has provisions repugnant to provisions made in the 1988 Act. There can be no controversy that if there is repugnancy, the Parliamentary legislation has to prevail and the law made by the State Legislature to the extent of repugnancy becomes void.
13. In cl.(1) of Art. 254 it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Concurrent List. The seven-Judge Bench examining the vires of the Karnataka Act did hold that the State Act was an Act for acquisition and came within Entry 42 of the Concurrent List. That position is not disputed before us. There is unanimity at the Bar that the Motor Vehicles Act is a legislation coming within Entry 35 of the Concurrent List. Therefore, the Acquisition Act and the 1988 Act as such do not relate to one common head of legislation enumerated in the Concurrent List and the State Act and the Parliamentary statute deal with different matters of legislation.
14. The language of cl.(2) is also similar though applicable in a different situation. Apparently in one sense both the clauses operate on a similar level though in dissimilar context. In cl.(2) what is relevant is the words : ‘With respect to that matter’. A Constitution Bench of this Court in Zaverbhai Amaidas v. State of Bombay ((1955) 1 SCR 799) emphasised that aspect. Venkatarama Ayyar, J. pointed out:
“The important thing to consider with reference to this provi sion is whether the legislation is ‘in respect of the same matter’. If the later legislation deals not with the matters which formed the subject of the earlier legislation but with other and distinct matters though of a cognate and allied character, then Art. 254(2) will have no application.”
15. A lot of light relevant to the aspect under consideration is available from another decision of a Constitution Bench of this Court: (M.Karunanidhi v. Union of India ((1979) 3 SCR 254). At p.263 of the Reports, it has been said:
“It would be seen that so far as clause (1) of Article 254 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect of one of the matters enumerated in the Concurrent List, then, subject to the provi sions of clause (2), the State law would be void to the extent of the repugnancy. This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act. In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parliament and the State Legis latures. First, regarding the matters contained in List I, i.e., the Union List to the Seventh Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is con cerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances:-
1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent (Emphasis added) and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
2. Where, however, a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254.
3. Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.
4. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only. Such a state of affairs will exist only until parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254.”
16. In Deep Chand v. State of Uttar Pradesh, supra, this Court had pointed out that repugnancy between two statutes would arise if there was direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupied the same field.
17. It has already been stated that the State Act intended to eliminate private operators from the State in regard to contract carriages acquired under the existing permits, vehicles and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in s.20 for excluding the private operators. The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act. Nor does it in s.73 or s.74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted. Section 80 of the 1988 Act does contain a liberalised provision in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in s.20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision.
18. Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the field. Since ss.73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking Art.254 of the Constitution. A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act.
19. A number of precedents have been cited at the hearing and those have been examined and even some which were not referred to at the Bar. There is no clear authority in support of the stand of the petitioners – where the State law is under one head of legislation in the Concurrent List; the subsequent Parliamentary legislation is under another head of legislation in the same List and in the working of the two it is said to give rise to a question of repugnancy.
20. The State Act had done away with the private operators qua contract carriages within the State. It is true that the 1988 Act is applicable to the whole of India and, therefore, is also applicable to the State of Karnataka in the absence of exclusion of the State of Karnataka from its operation. But as has been pointed out already, there is no direct inconsistency between the two and on the facts placed in the case there is no necessary invitation to the application of cl.(1) of Art.254 of the Constitution.
21. The writ petitions fail and are dismissed.
SAWANT, J. :
22. This group of petitions raises a common question of law viz.: whether the Motor Vehicles Act, 1988 (hereinafter referred to as the MV Act 1988) has impliedly repealed the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the Karnataka Act).
23. The petitioners claim a declaration that the provision of Sec.14 and 20 of the Karnataka Act are invalid because of their repugnancy with the provisions of the MV Act, 1988, and a direction to respondent nos. 2 and 3, namely the Karnataka State Transport Authority and the Karnataka Regional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sec.74 and 80 of the MV Act, 1988, without reference to the provisions of the Karnataka Act. The precise question that falls for consideration, therefore, is whether there is a repugnancy between the two legislations.
24. The Karnataka Act, as its title shows, was enacted to provide for the acquisition of contract carriages and for matters incidental, ancillary and subservient thereto. It was enacted under Entry 42 of the Concurrent List read with Article 31 of the Constitution, in furtherance of Article 39(b) and (c) thereof. This is evident from the preamble, and Section 2 of the Act. The preamble states that since the contract carriages and certain other categories of public service vehicles were being operated in the State in a manner highly detrimental and prejudicial to public interest, it was necessary to prevent the misuse, and to provide better facility for the transport of the passengers by road. It was also necessary to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community were so distributed as best to subserve the common good and that the operation of the economic system did not result in the concentration of wealth and means of production to the common detriment. To effectuate the said intention it was considered necessary to enact the legislation. Section 2 of the Act makes a declaration in the following words:
“It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles speci fied in Clauses (b) and (c) of Article 39 of the Constitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4.”
25. Under Section 4 of the Act every contract carriage owned or operated by contract carriage operator along with the permit or the certificate of registration or both as the case may be, vested in the State Government absolutely and free from all encumbrances. Further, all rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, instruments, machinery, tools, plants, apparatus and other equipments used for the maintenancy, repair of, or otherwise in connection with the service of the contract carriage as the State Government may specify in that behalf and all books of accounts, registers, records and all other documents of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose. Section 6 provided for payment of compensation for the acquisition of all the said property.
26. Since the avowed object of the Act was two fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy underlying Clauses (b) and (c) of Article 39 of the Constitution, it was also necessary to prevent the issue of fresh permits or renewal of the existing permits for running the contract carriages in the State to any private individual. Hence, Section 14 provided for a prohibition of the issue of fresh permit or renewal of the existing permit to any individual or the transfer of such permit to anyone except to the State Government or the Corporation which it may establish under the Karnataka State Road Transport Corporation Act, 1950. To make an alternative arrangement for running the contract carriages and to prevent both the misuse of the permits as well as concentration of wealth in the hands of a few individuals, Section 20 of the Act provided that all contract carriage-permits granted or renewed till then would stand cancelled and the Corporation alone would be entitled to the grant of renewal of the said permits to the exclusion of all other persons, and that applications from persons other than the Corporation for the grant of such permit shall not be entertained.
27. In State of Karnataka & Anr. Etc. Vs. Shri Ranganatha Reddy & Anr. Etc. 1978 (1) SCR 641 this Court upheld the validity of the said Act holding, among other things, that the Act was for acquisition of property and was in the public interest and for a public purpose. The Act, according to the Court, had nationalised the contract transport service in the State and that was also for a public purpose as declared in the Act. It was also observed that if Articles 38 and 39 are to be given effect to, then the State has progressively to assume the predominant and direct responsibility for setting up new industrial undertakings which would also include development of transport facilities. The State has also to become agency for planned national development, and the socialistic pattern of society as the national objective required that public utility services should be in the public sector. The acquisition of road transport undertakings by the State, therefore, undoubtedly served the public purpose.
28. It is thus clear from the provisions of the Karnataka Act that the whole object of the Act is to nationalise the contract carriage service in the State with a view to put an end to the abuse of the contract carriage services by the private operators and to provide better transport facilities to the public, and also to prevent concentration of the wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all. To secure the objective of the Act, it was also necessary to prohibit the grant of the contract carriage permits to private individuals and to reserve them exclusively to the State Undertaking which was done by Sections 14 and 20 of the Act. Unlike the MV Act 1988, which is admittedly enacted by the Parliament under Entry 35 of the Concurrent List, to regulate the operation of the motor vehicles, the object of the Karnataka Act is not only the regulation of the operation of the motor vehicles. Nor is its object merely to prevent the private owners from operating their vehicles with the exclusive privilege of such operation being reserved in favour of the State or the State Undertaking. For if that were the only object, the same could have been achieved by the Transport Undertakings of the State following the special provisions relating to State Transport Undertakings in Chapter IV-A of the Motor Vehicles Act, 1939 which was in operation when the Karnataka Act was brought into force. The very fact that instead, the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legislature in enacting it was materially different. This is also obvious from the various provisions of the enactment pointed out above.
29. It is for this reason that the contention advanced by the petitioners that the object of the Karnataka Act and that of the MV Act, 1988 is the same and that both of them occupy the same field, cannot be accepted. A comparison of the provisions of the MV Act, 1939 (Old Act) and MV Act, 1988 (New Act) further shows that the latter has merely replaced the former. All that it has done is to update, simplify and rationalize the law on the subject. For this purpose it has made important provisions in the following matters, namely:
“a) rationalisation of certain definitions with additions of certain new definitions of new types of vehicles;
b) stricter procedures relating to grant of drawing licences and the period of validity thereof;
c) laying down of standards for the components and parts of motor vehicles;
d) standards for anti-pollution control devices;
e) provision for issuing fitness certificates of vehicles also by the authorised testing stations;
f) enabling provision for updating the system of registration marks;
g) liberalised schemes for grant of stage carriage permits on non-nationalised routes, all India Tourist permits and also national permits for goods carriages;
h), i), j), k), l), ……”
30. The special provisions relating to the State Transport Undertakings which are contained in Chapter VI of the new Act are pari-materia with those of Chapter IV-A of the old Act, with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself. There is no difference in the legal consequences of the schemes under the two enactments. Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit. No acquisition of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnataka Act.
31. It is also not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field. We see no such provision in the Act nor was any pointed out to us. The provisions with regard to the grant of permits under both the old and the new Act are the same. In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act.
32. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karnataka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof. The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the concurrent list to regulate the operation of the motor vehicles. The objects and the subject matters of the two enactments are materially different. Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations.
33. Shri Nariman, the learned counsel for the petitioners however, contended that the provisions of Section 14 and 20 of the Karnataka Act were in direct conflict with the provisions of Sections 74 and 80(2) of the MV Act 1988. According to him while the Regional Transport Authority (RTA) is enjoined by the provisions of Section 74 read with Section 80(2) of the MV Act 1988, ordinarily not to refuse to grant an application for permit of any kind, the provisions of Section 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from entertaining or granting, application for running any contract carriage in the State. Thus there is a direct conflict between the two legislations, and since the MV Act 1988 is a later legislation, operating in the same area, it should be deemed to have impliedly repealed the provisions of Section 14 and 20 of the Karnataka Act, even if the latter Act had received the assent of the President. This is so because of the proviso to sub-clause (2) of Article 254 of the Constitution.
34. This contention proceeds on the footing that the two legislations occupy the same field. As has been pointed out earlier, the objects of the two legislations are materially different. The provisions of Sections 51 and 57 of the old Act further correspond to provisions of Section 74 and 80 of the new Act. The Karnataka Act had received the assent of the President in spite of the provisions of Sections 51 and 57 of the old Act. The assent of the President, further as stated by the respondents, was taken by way of abundant precaution, although the subject matters of the two Acts were different. The provisions of Sections 14 and 20 of the Karnataka Act were incidental and necessary to carry out the main object of the said Act. Without the said provisions, the object of the said Act would have been frustrated. In the case of State of Karnataka & Anr. Etc. Vs. Ranganatha Reddy & Anr. Etc. (supra) while repelling the contention that there was a legislative encroachment by the Karnataka Act because it impinged on the subject of Inter-State Trade & Commerce in the Union List as it provided also for acquisition of transport carriages running on inter-state routes, this Court in para 32 of the Judgment has observed as follows:
“……It (the Karnataka Act) is not an Act which deals with any Inter-State trade and Commerce. Even assuming for the sake of argument that carriage of passengers from one State to the other is in one sense a part of the Inter-State Trade and Commerce, the impugned Act is not one which seeks to legislate in regard to the said topic. Primarily and almost wholly it is an Act to provide for the acquisition of contract carriages, the Intra-State permits and the other properties situated in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental encroachment on the topic of inter State trade and commerce, even assuming there is some, cannot invalidate the Act. The MV Act 1939 was enacted under Entry 20 of List III of Schedule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution. The subject being in the Concur rent List and the Act having received the assent of the Presi dent, even the repugnancy, if any between the Act and the Motor Vehicles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List III deals with acquisition of prop erty. The State has enacted the Act mainly under this entry……” (Emphasis supplied)
35. According to me these observations should put an end to any controversy on the subject, namely, whether the two Legislations are enacted under two different entries in the Concurrent List, and whether they occupy different areas or not.
36. I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988. Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the MV Act 1939) that Chapter VI relating to the special provisions about the State Transport Undertaking and the rules and orders made thereunder, shall have effect notwithstanding anything inconsistent therewith contained in Chapter V or any other law for the time being in force or in any instrument having effect by virtue of any such law. Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V. This means that when under Chapter VI, a scheme is prepared by the State Govt. entrusting the contract carriage services in relation to any area or route or portion thereof, to a State Transport Undertaking to the exclusion – complete or partial of other persons, the provisions of Sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under Section 80 nor can such permits be granted by the Transport Authority. In other words, the MV Act 1988 also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised. Hence it is not correct to say that there is a conflict between the provisions of the two Acts.
37. It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitution, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legislation are in conflict with some of the provisions of the Central legislation, the conflicting provisions of the State legislation will be invalid. In support of this contention, reliance was placed on two decisions one of the Federal Court in the case of Meghraj & Ors. Vs. Allahrakhiya & Ors. (29) AIR 1942 SC 27 and the other of the Privy Council reported in AIR (34) 1947 PC 722 confirming the former.
38. The Federal Court in the above decision has observed that when a provincial Act is objected to as contravening not Section 100 but Section 107(1) the Govt. of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise. In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code. The Court held that there was no repugnancy between the legislations. But while holding so, the Court made a one sentence observation as follows: “In the judgment of the High Court there is some discussion of the question of the “pith and substance” of the Act; but that question does not arise as objection is taken not under Section 100 of the Constitution Act but Sec.107.” There is no discussion on the point. The arguments, if any advanced on the question are neither reproduced nor dealt with. The observation further was not necessary for the decision in that case, since as is pointed out above, the Court had held that there was no repugnancy between the two statutes since they covered two different subject matters. Hence the issue as to whether the impugned Punjab Restitution of Mortgage Lands Act was valid because the pith and substance of the Act covered an area different from the one covered by the Contract Act and the Civil Procedure Code, did not fall for consideration before the Court. What is more, when the matter went in appeal before the Privy Council, the said point was not even remotely referred to, and I find no observation in the judgment either confirming or dissenting from, the said observations. This being the case the said observations cannot be regarded as more than general in nature. They are not even an obiter-dicta much less are they the ratio decidendi of the case. Hence the said observations do not have a binding effect.
39. Even otherwise, I am of the view that not to apply the theory of pith and substance when the repugnancy between the two statutes is to be considered under Article 254 of the Constitution, would be illogical when the same doctrine is applied while considering whether there is an encroachment by the Union or the State legislature or a subject exclusively reserved for the other. When the legislative encroachment is under consideration the doctrine of pith and substance comes to the aid to validate a legislation which would otherwise be invalid for the very want of legislative competence. When the repugnancy between the two legislations is under consideration, what is in issue is whether the provision of the State enactment though otherwise constitutionally valid, has lost its validity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter. If it is open to resolve the conflict between two entries in different Lists, viz. the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legislations, there is no reason why the repugnancy between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same touch-stone. What is to be ascertained in each case is whether the legislations are on the same subject matter or not. In both cases the cause of conflict is the apparent identity of the subject matters. The tests for resolving it therefore cannot be different.
