# M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v. The Karnataka State Road Transport Corporation Workers & Ors

- **Citation:** 2025 INSC 152
- **Court:** Supreme Court of India
- **Decided:** 2025-02-06
- **Case number:** Civil Appeal Nos. 2181-2182 of 2025
- **Bench:** Vikram Nath, Prasanna B. Varale
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-s-r-s-travels-by-its-proprietor-k-t-rajashekar-v-the-karnataka-state-road-38846
- **Pages:** 27

## Headnote

Issue arose as regards the constitutional validity of the Karnataka
Motor Vehicles Taxation and Certain Other Law (Amendment) Act,
2003 repealing the Karnataka Contract Carriages (Acquisition) Act,
1976 particularly given that the 1976 Act had earlier been upheld
by this Court; and whether u/s.68(5) of the Motor Vehicles Act read
with r. 56 of the Karnataka Motor Vehicle Rules, 1989, the state
and regional transport authorities can lawfully delegate the power
to grant contract carriage permits to the Secretary or whether such
power must remain with the multi-member authorities due to its
quasi-judicial character.
Headnotes†
Karnataka Motor Vehicles Taxation and Certain Other Law
(Amendment) Act, 2003 - s.3 - Karnataka Contract Carriages
(Acquisition) Act, 1976 - Validity of repealing Act - Power of
the legislature to repeal an Act - Presidential assent for repeal
statute, if required - KCCA Act 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 - However, over the ensuing
decades, 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 - In response, the Legislature
exercised its plenary power by enacting the 2003 Act which
repealed the KCCA Act - Constitutional validity of repealing
Act:
* Author
[2025] 3 S.C.R.
263
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
Held: s.3 of the 2003 Act which repeals the KCCA Act, is
constitutional, and State Legislature rightly exercised its power
to repeal the Act - Power to repeal a law is coextensive with the
power to enact it - 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 -
This Court's decisions affirming the constitutional validity of an
Act, do not bind the Legislature from modifying or repealing
a statute when subsequent developments warrant a change
in policy - It cannot be said that repeal should have required
fresh presidential assent - Repeal statute does not recreate
the legal framework anew but rather extinguishes the earlier
Act's operative provisions - Repeal statute 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 - 2003
Repeal Act is rooted in the practical realities of modern transport
policy - Repeal of the KCCA Act was thus a deliberate policy
decision aimed at fostering a more dynamic and responsive
transport framework - Legislature may, subject to constitutional
limitations, repeal any law it has enacted - Repeal does not alter
or contradict the judicial interpretation of the 1976 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.
[Paras 10, 11, 13-18]
Motor Vehicles Act 1988 - ss.68(3)(b), 96 - Karnataka Motor
Vehicle Rules, 1989 - rr.55, 56 - Delegation of power to grant
permit - Under s.68(5) of the MV Act, rw r.56 of the 1989
Rules, State Transport Authority-STA and Regional Transport
Authorities-RTA, if can lawfully delegate the power to grant
contract carriage permits to the Secretary or such power to
remain with the multi-member authorities due to its quasijudicial character:
Held: State Transport Authority possesses the power to delegate
its functions u/s.68(5) of the MV Act read with r.56(1)(d) of the
KMV Rules - Secretary of the STA is empowered to grant non-
264
[2025] 3 S.C

## Text

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[2025] 3 S.C.R. 262 : 2025 INSC 152
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar
v.
The Karnataka State Road Transport Corporation
Workers & Ors.
(Civil Appeal No(s). 2181-2182 of 2025)
06 February 2025
[Vikram Nath* and Prasanna B. Varale, JJ.]
Issue for Consideration
Issue arose as regards the constitutional validity of the Karnataka
Motor Vehicles Taxation and Certain Other Law (Amendment) Act,
2003 repealing the Karnataka Contract Carriages (Acquisition) Act,
1976 particularly given that the 1976 Act had earlier been upheld
by this Court; and whether u/s.68(5) of the Motor Vehicles Act read
with r. 56 of the Karnataka Motor Vehicle Rules, 1989, the state
and regional transport authorities can lawfully delegate the power
to grant contract carriage permits to the Secretary or whether such
power must remain with the multi-member authorities due to its
quasi-judicial character.
Headnotes†
Karnataka Motor Vehicles Taxation and Certain Other Law
(Amendment) Act, 2003 - s.3 - Karnataka Contract Carriages
(Acquisition) Act, 1976 - Validity of repealing Act - Power of
the legislature to repeal an Act - Presidential assent for repeal
statute, if required - KCCA Act 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 - However, over the ensuing
decades, 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 - In response, the Legislature
exercised its plenary power by enacting the 2003 Act which
repealed the KCCA Act - Constitutional validity of repealing
Act:
* Author
[2025] 3 S.C.R.
263
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
Held: s.3 of the 2003 Act which repeals the KCCA Act, is
constitutional, and State Legislature rightly exercised its power
to repeal the Act - Power to repeal a law is coextensive with the
power to enact it - 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 -
This Court's decisions affirming the constitutional validity of an
Act, do not bind the Legislature from modifying or repealing
a statute when subsequent developments warrant a change
in policy - It cannot be said that repeal should have required
fresh presidential assent - Repeal statute does not recreate
the legal framework anew but rather extinguishes the earlier
Act's operative provisions - Repeal statute 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 - 2003
Repeal Act is rooted in the practical realities of modern transport
policy - Repeal of the KCCA Act was thus a deliberate policy
decision aimed at fostering a more dynamic and responsive
transport framework - Legislature may, subject to constitutional
limitations, repeal any law it has enacted - Repeal does not alter
or contradict the judicial interpretation of the 1976 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.
[Paras 10, 11, 13-18]
Motor Vehicles Act 1988 - ss.68(3)(b), 96 - Karnataka Motor
Vehicle Rules, 1989 - rr.55, 56 - Delegation of power to grant
permit - Under s.68(5) of the MV Act, rw r.56 of the 1989
Rules, State Transport Authority-STA and Regional Transport
Authorities-RTA, if can lawfully delegate the power to grant
contract carriage permits to the Secretary or such power to
remain with the multi-member authorities due to its quasijudicial character:
Held: State Transport Authority possesses the power to delegate
its functions u/s.68(5) of the MV Act read with r.56(1)(d) of the
KMV Rules - Secretary of the STA is empowered to grant non-
264
[2025] 3 S.C.R.
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stage carriage permits (including contract carriage, special, tourist,
and temporary permits) in accordance with s.68(5) and r. 56(1)
(d), subject to the limitations and conditions prescribed therein -
1988 Act unambiguously confers upon the transport authorities,
the power to delegate its functions provided that rules are framed
u/s.96 - Even if it is accepted that the grant of permits has a quasijudicial 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 - s.68(5) read with r. 56(1)
(d) makes it clear that the Legislature intended for the transport
authority to delegate certain routine permit functions - Exclusion of
stage carriage permits from this delegation does not imply that all
permit functions are inherently non-delegable - STA is entrusted
with a wide range of responsibilities under the Motor Vehicles Act,
and its workload necessitates delegation to ensure timely service
delivery - Secretary, being a high-ranking officer with substantial
expertise in transport administration, is well equipped to handle
routine permit applications - Practical impact of not allowing
delegation would be to overload the transport authority with routine
functions, potentially causing undue delays and inefficiencies -
Power of the State Transport Authority to delegate the issuance
of contract carriage, special, tourist, and temporary permits to its
Secretary is fully supported by the statutory provisions of s.68(5) and
r.56(1)(d) - 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 - 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 - High Court's reasoning
on the non-delegability of permit-granting power is flawed -
Impugned orders of the High Court that denied the delegation
power set aside. [Paras 20-30]
Case Law Cited
State of Karnataka v. Ranganatha Reddy [1978] 1 SCR 641 : AIR
1978 SC 215; Vijayakumar Sharma v. State of Karnataka AIR 1990
SC 2072; Vijay Kumar Sharma v. State of Karnataka [1990] 1
SCR 614 : (1990) 2 SCC 562; Newtech Promoters & Developers
Private Limited v. State of Uttar Pradesh & Others [2021] 9 SCR
[2025] 3 S.C.R.
265
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
909 : (2021) 18 SCC 1; Ramakrishna v. Janpad Sabha [1962]
Supp. 3 SCR 70 : AIR 1962 SC 1073 - referred to.
List of Acts
Karnataka Motor Vehicles Taxation and Certain Other Law
(Amendment) Act, 2003; Karnataka Contract Carriages (Acquisition)
Act, 1976; Motor Vehicles Act, 1988; Karnataka Motor Vehicle
Rules, 1989; Road Transport Corporations Act, 1950; Constitution
of India; General Clauses Act, 1897.
List of Keywords
Contract carriages; Contract carriage permits; Stage Carriage;
Stage carriage permits; State Transport Authority; Regional
Transport Authority; State Transport Corporation; Artificial scarcity of
public transport; Liberalize public transport; Private bus operators;
Presidential assent; Permit-granting power; Repeal statute;
Entry 42 of List III; "Secretary alone" approach; Private operators
in the contract carriage; Fresh Presidential assent; Quasi-judicial
functions; Secretary; State Transport Officer; Delegated power;
Repealing the Karnataka Contract Carriages (Acquisition) Act, 1976;
Delegate power to grant contract carriage permits to Secretary;
Validity of repealing Act; Power of the legislature to repeal an
Act; Presidential assent for repeal statute, if required; Privately
operated contract carriages under State control; Public interest;
Directive Principles of State Policy; Public transport; Rural and
semi-urban areas; Plenary power; Subsequent developments;
Repeal statute; Legislative competence of State; Practical realities
of modern transport policy; Policy decision; Grant of non-stage
carriage permits; Contract carriage, special, tourist, and temporary
permits; Principle of administrative law.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2181-2182
of 2025
From the Judgment and Order dated 28.03.2011 of the High Court
of Karnataka at Bengaluru in WA No. 5466 of 2004 and WA No.
60 of 2005
With
Civil Appeal Nos. 1985-2153 and 2154-2180 of 2025
266
[2025] 3 S.C.R.
Digital Supreme Court Reports
Appearances for Parties
Ms. Kiran Suri, Col Balasubramaniyam, Devadatt Kamat, Sr. Advs.,
Amith S.J., Ms. Vidushi Garg, Dr. (Mrs. ) Vipin Gupta, Mrs. T S
Shanthi, Ms. Sneha Irine Kachhap, Sanjeev Kumar, Narendra
Kumar, D. L. Chidananda, Hruday Pavan, Revanta Solanki, Advs.
for the Appellant.
Devadatt Kamat, Col Balasubramaniam, Ms. Kiran Suri,
Shanthakumar V. Mahale, Sr. Advs., Ms. Abha R. Sharma, V.
N. Raghupathy, Harsh Pandey, Hruday Bajentri, Ms. Anuradha
Mutatkar, Mrs. T S Shanthi, Narendra Kumar, Ms. Sneha Irine
Kachhap, Sanjeev Kumar, Anil Kumar, Amith S.J., Ms. Vidushi
Garg, Dr. (Mrs.) Vipin Gupta, Ms. Mrinal Pande, Ms. S. Anuradha
Bhat, Harisha S.R., Ranvir Singh, Rishi Kumar Singh Gautam,
Advs. for the Respondent.
Judgment / Order of the Supreme Court
Judgment
Vikram Nath, J.
1.
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, 1950.1
1
The 1950 Act
[2025] 3 S.C.R.
267
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
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, 19762) - 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 Reddy3 and later reaffirmed
in Vijayakumar Sharma v. State of Karnataka.4 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, 19885 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
Authority6 and the Regional Transport Authority,7 mandating
2
The KCCA Act
3
AIR 1978 SC 215
4
AIR 1990 SC 2072
5
MV Act
6
STA
7
RTA
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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, 19898
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,9 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, 2003.10 Among
other amendments (notably to taxation laws), Section 3 of the
2003 Repeal Act repealed the 1976 KCCA Act. According to
8
KMV Rules
9
(1990) 2 SCC 562
10
The 2003 Repeal Act or Karnataka Act No.9 of 2003
[2025] 3 S.C.R.
269
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
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.
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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:
[2025] 3 S.C.R.
271
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
 •
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, 1976
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 stateowned road transport corporations such as KSRTC.
Judicial Endorsement - The 1976 Act was upheld by this
Court in State of Karnataka v. Ranganatha Reddy11 and later
reaffirmed in Vijayakumar Sharma v. State of Karnataka.12
These decisions recognized that the statutory objective,
11
AIR 1978 SC 215
12
(AIR) 1990 SC 2072
272
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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.
[2025] 3 S.C.R.
273
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
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 multimember authorities due to its quasi-judicial character.
7.
The learned Senior Counsel for the Appellants, Mr. Devadatt Kamat
and Ms.Kiran Suri 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
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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
[2025] 3 S.C.R.
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The Karnataka State Road Transport Corporation Workers & Ors.
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,13 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, Col.
Balasubramanian, 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.
13
(2021) 18 SCC 1
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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
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M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
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
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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.
[2025] 3 S.C.R.
279
M/s S.R.S. Travels by its Proprietor K.T. Rajashekar v.
The Karnataka State Road Transport Corporation Workers & Ors.
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
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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,14 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.