# VIJA Y KUMAR SHARMA & ORS. ETC v. STATE OF KARNATAKA & ORS. ETC. FEBRUARY27, 1990

- **Citation:** [1990] 1 S.C.R. 614
- **Court:** Supreme Court of India
- **Decided:** 1990
- **Bench:** Ranganath Misra, P.B. Sawant, K. Ramaswamy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vija-y-kumar-sharma-ors-etc-v-state-of-karnataka-ors-etc-february27-1990-10657
- **Pages:** 73

## Headnote

Karnataka Contract Carriages (Acquisition) Act, 1976: ss. 14, &
20-Whether repugnant toss. 74 & 80, Motor Vehicles Act, 1988-State
Act whether impliedly repealed by Parliamentary Act-State Act
whether hit by Article 254 of the Constitution.
Constitution of India, Article 254: Repugnancy between the
Parliamentary Act and the State Act in respect of matters in the Concurrent List,
Seventh Schedule-When arises-Karnataka Contract
Carriages (Acquisition) Act, 1976-Whether repugnant to the Motor
D Vehicles Act, 1988.
E
Statutory interpretation-Doctrine of pith and substance or .dominant purpose-Scope of-Whether applicable to find repugnancy under
Article 254 of the Constitution between Parllamentary and State laws in
respect of matters in List III. Seventh Schedule to _the Constitution.-
The Karnataka Contract Carriages (Acquisition) Act, 1976 enacted by the State Legislature by taking aid of Entry 42 List III of the
Seventh Schedule and Articles 31 and 39 (b) and (c) of the Constitution
was reserved for consideration and received the assent of the President
of March 11, 1976. Section 4 of that Act provided for vesting of contract
P
carriages along with the respective permits and/or certificates of registration issued under the Motor Vehicles Act, 1939 in the State absolutely
free from encumbrances. Sub-section (1) of s. 14 prohibited applications for fresh permits or renewal of existing permits on or from the
date of vesting. Section 14(2) provided for abatement of all applications,
appeals or revisions pending before the appropriate authority as on the
G notified date. Sub-section (1) of s. 20 provided for calcellation of,
notwithstanding anything in the 1939 Act, all contract carriage permits
granted or renewed in respect of any vehicle, other than a vehicle
acquired under the Act or belonging to the State Road Transport
Corporation. Sub-section (2) entitled the Corporation to the grant or
renewal of contract carriage permits to the exclusion of all other
· Ff persons, while sub-section (3) restrained the authority concerned from
614
·-
-
-
V.K. SHARMA v. STATE OF KARNATAKA
615
entertaining applications from persons other than the Corporation.
Section 73 of the Motor Vehicles Act, 1988 (enacted to replace the
1939 Act) lays down the mode of application for a contract carriage
permit. Section 74(1) empowers the Regional Transport Authority to
grant such permits. Sub-section (2) enumerates conditions that could be
attached to such permit. Sub-section (3) empowers the State Government when directed by the Central Government to limit the number of
contract carriages on the city routes. Under s. 80(1) such application
could be made at any time. Sub-section (2) posits that a Regional Transport Authority shall not ordinarily refuse to grant such application.
Section 217(1) repealed all the laws which were inconsistent with the
provisions of the Act.
The petitioners, a group of contract carriage operators who were
denied permits that they had applied for under ss. 73, 74 and 80 of the
Motor Vehicles Act, 1988 in view of the provisions ofss. 14 and 20 of the
Karnataka Contract Carriages (Acquisition) Act, 1976, filed writ petitions under Article 32 <if the Constitution questioning the action of the
R. T.A. It was contended that the provisions of ss. 14 and 20 of the
Karnataka Act were in direct conflict with the provisions of ss. 74 and
80(2) of.the M. V. Act, 1988 in as much as while the Regional Transport
Authority was enjoined by the said provisions of the 1988 Act ordinarily ·
not to refuse to grant an application for permit of any kind, the said
provisions of the Karnataka Act prohibited any person from applying
for, and any officer or authority from entertaining or granting application for running any contract carriage in the State; that since the M. V.
Act, 1988 was a later legislation operating in the same area, it should be
deemed to have impliedly repealed the provisions ofss. 14 and 20 of the
Karnataka Act even if the latter A

## Text

_Characters 0–39,934 of 189,011. This is a partial read: ask again with offset=39934 for what follows._

A
B
c
VIJA Y KUMAR SHARMA & ORS. ETC.
v.
STATE OF KARNATAKA & ORS. ETC.
FEBRUARY27, 1990
[RANGANATH MISRA, P.B. SAWANT, AND
K. RAMASWAMY, JJ.]
Karnataka Contract Carriages (Acquisition) Act, 1976: ss. 14, &
20-Whether repugnant toss. 74 & 80, Motor Vehicles Act, 1988-State
Act whether impliedly repealed by Parliamentary Act-State Act
whether hit by Article 254 of the Constitution.
Constitution of India, Article 254: Repugnancy between the
Parliamentary Act and the State Act in respect of matters in the Concurrent List,
Seventh Schedule-When arises-Karnataka Contract
Carriages (Acquisition) Act, 1976-Whether repugnant to the Motor
D Vehicles Act, 1988.
E
Statutory interpretation-Doctrine of pith and substance or .dominant purpose-Scope of-Whether applicable to find repugnancy under
Article 254 of the Constitution between Parllamentary and State laws in
respect of matters in List III. Seventh Schedule to _the Constitution.-
The Karnataka Contract Carriages (Acquisition) Act, 1976 enacted by the State Legislature by taking aid of Entry 42 List III of the
Seventh Schedule and Articles 31 and 39 (b) and (c) of the Constitution
was reserved for consideration and received the assent of the President
of March 11, 1976. Section 4 of that Act provided for vesting of contract
P
carriages along with the respective permits and/or certificates of registration issued under the Motor Vehicles Act, 1939 in the State absolutely
free from encumbrances. Sub-section (1) of s. 14 prohibited applications for fresh permits or renewal of existing permits on or from the
date of vesting. Section 14(2) provided for abatement of all applications,
appeals or revisions pending before the appropriate authority as on the
G notified date. Sub-section (1) of s. 20 provided for calcellation of,
notwithstanding anything in the 1939 Act, all contract carriage permits
granted or renewed in respect of any vehicle, other than a vehicle
acquired under the Act or belonging to the State Road Transport
Corporation. Sub-section (2) entitled the Corporation to the grant or
renewal of contract carriage permits to the exclusion of all other
· Ff persons, while sub-section (3) restrained the authority concerned from
614
·-
-
-
V.K. SHARMA v. STATE OF KARNATAKA
615
entertaining applications from persons other than the Corporation.
Section 73 of the Motor Vehicles Act, 1988 (enacted to replace the
1939 Act) lays down the mode of application for a contract carriage
permit. Section 74(1) empowers the Regional Transport Authority to
grant such permits. Sub-section (2) enumerates conditions that could be
attached to such permit. Sub-section (3) empowers the State Government when directed by the Central Government to limit the number of
contract carriages on the city routes. Under s. 80(1) such application
could be made at any time. Sub-section (2) posits that a Regional Transport Authority shall not ordinarily refuse to grant such application.
Section 217(1) repealed all the laws which were inconsistent with the
provisions of the Act.
The petitioners, a group of contract carriage operators who were
denied permits that they had applied for under ss. 73, 74 and 80 of the
Motor Vehicles Act, 1988 in view of the provisions ofss. 14 and 20 of the
Karnataka Contract Carriages (Acquisition) Act, 1976, filed writ petitions under Article 32 <if the Constitution questioning the action of the
R. T.A. It was contended that the provisions of ss. 14 and 20 of the
Karnataka Act were in direct conflict with the provisions of ss. 74 and
80(2) of.the M. V. Act, 1988 in as much as while the Regional Transport
Authority was enjoined by the said provisions of the 1988 Act ordinarily ·
not to refuse to grant an application for permit of any kind, the said
provisions of the Karnataka Act prohibited any person from applying
for, and any officer or authority from entertaining or granting application for running any contract carriage in the State; that since the M. V.
Act, 1988 was a later legislation operating in the same area, it should be
deemed to have impliedly repealed the provisions ofss. 14 and 20 of the
Karnataka Act even if the latter Act had received the assent of the
President, in view of the proviso to sub-clause (2) of Article 254 of the
Constitution; that when there is a repugnancy under Article 2~'! of the
Constitution, the doctrine of pith and substance does not apply, and
even if some of the provisions of the State Legislation are in conflict with
some of the provisions of the Central legislation, the conflicting provisions of the State legislation, will be invalid and that, therefore, their
applications under ss. 74 and 80 were maintainable without reference to
the provisions of the Karnataka Act.
A
B
c
D
E
F
G
For the respondents it was contended that the Acquisition Act was
made in exercise of the power 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, and that the Acquisition Act having been
H
616
SUPREME COURT REPORTS
[1990] 1 S.C.R.
A
reserved ,for consideration under Art. 254(2) and having received the 'r
assent of the President, it prevails over the Parliamentary Act in the
State of Karnataka.
On the question: Whether there is repugnancy between the provisions of ss. 14 and 20 of the Karnataka Contract Carriages (AcquisiB
lion) Act, 1976 and ss. 74 and 80 of the Motor Vehicles Act, 1988 and
whether the doctrine of dominant purpose and pith and substance is
applicable while examining the repugnancy of the two statutes?
Per Misra, J. (Concurring with Sawant, J.)
c
I. There is no direct inconsistency between the Karnataka Contract Carriages (Acquisition) Act, 1976 and the Motor Vehicles Act,
1988. [631G-HJ
2.1 In cl. (l) of Art. 254 of the Constitution it has been clearly
indicated that the competing legislations must be in respect of one of the
D matters enumerated in the Concurrent List. In the instant case, the
State Act was an Act for acquisition and came within Entry 42 of The
Concurrent List. The Parliamentary Act on the other hand is a legislation coming within Entry 35 of the Concurrent List. Therefore, the said
· two Acts as such do not relate to one common head of legislation
enumerated in the Concurrent List. Clause (2) also refers to the law with
E respect to the same matter. [628F; 629A]
2.2 Repugnancy between two statutes would arise if there is
direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupy the same field.
In the instant case, the State Act intended to eliminate private operators
f
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. The Parliamentary 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 ands. 74
G 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 Parliamentary Act does conlain a liberalised provision in the matter of grant of permits but even
then there again the ancillary provision contained in s. 20 of the State
Act to effectuate acquisition does not directly run counter to the 1988
H provision. [630G; 631C]
f
I
' ~
)-....
......
.,
y
~'
·~··
-
, -~·
V.K. SHARMA v. STATE OF KARNATAKA
617
There does not thus appear to be any repugnancy between the two
Acts for invoking Art. 254 of the Constitution. [6310-E]
Bar Council of Uttar Pradesh v. State of U.P. & Anr., [1973] 2
SCR 1073; Kera/a State Electricity Board v. Indian Aluminium Company, [1916] l SCR 552; Deep Chand v. State of Uttar Pradesh & Ors.,
[1959] 2 Suppl. SCR 8; T. Barai v. Henry Ah Hoe & Anr., [1983] 1
SCR 905; Hoechst Pharmaceuticals Ltd. & Anr. v. State of Bihar &
Ors., [1983] 3 SCR 130; Zaverbhai Amaidas v. State of Bombay, [1955]
1 SCR 799; M. Karunanidhi v. Union of India, [1979] 3 SCR 254 and
State of Karna/aka & Anr. v. Ranganatha Reddy & Anr., [1978] 1 SCR
641, referred to.
Per Sawant, J:
1. There is no repugnancy in the provisions ofss. 14 and 20 of the
Karnataka Contract Carriages (Acquisition) Act, 1976 and ss. 74 and
80 of the Motor Vehicles Act, 1988. Hence the provisions of Article 254
A
B
c
of the Constitution do not come into play. [652F; 636C]
D
2.1 Whenever. repugnancy between the State and Central Legislation is alleged, what has to be first examined is whether the two legislations cover or relate to the same subject matter. The test for determin·
ing the same is to find out the dominant intention of the two legislations.
If the dominant intention of the two legislations is different, they cover
E
different subject matters. If the subject matters covered by the legislation are thus different, then merely because the two legislations refer to
some allied or cognate subjects they do not cover the same field. The
legislation to be on the same subject matter must further cover the
entire field covered by the other. [652C-D]
F
A provision in one legislation to give effect to its dominant
purpose may incidentally be on the same subject as covered by the
provision of the other legislation. But such partial coverage of the same
area in a different context and to achieve a different purpose does not
bring about the repugnancy which is intended to be covered by Article
254(2). Both the legislations must be substantially on the same subject
G
to attract the Article. [652E]
Municipal Council Palai v. T.J. Joseph & Ors., [1964] 2 SCR 87;
Tika Ramji & Ors. etc. v. State of U.P. & Ors., [1956] SCR 393 and
State of Karnataka & Anr. etc. v. Ranganatha Reddy & Anr. etc.,
[1978] 1SCR641, referred to.
H
A
B
c
618
SUPREME COURT REPORTS
I 1990] I S.C.R.
Ratan Lal Adukia v. Union of India, [1989] 3 SCR 537,
distinguished.
l.2 In the instant case, the objects and the subject matters of the
two enactments were materially different. The Karnataka Act was
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 was enacted by the Parliament
under Entry 35 of the Concurrent List to regulate the operation of the
motor vehicles. They thus occupy different areas. [636C, B-C]
2.3 Unlike the MV Act 1988 which was enacted to regulate the
operation of the motor vehicles, the object of the Karnataka Act was
not only the regulation of the operation of the motor vehicles. Nor was
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,
D
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 Vehicle Act, 1939 which was in
operation when the Karnataka Act was bronght 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
E
materially different i.e. to nationalise the contract carriage services in the
State with a view to provide better transport facilities to the public and
also to prevent concentration of wealth in the hands of the few and to utilise
the resources of the country to subserve the interests of all. [634D-F; B-C]
3.1 A comparison of the provisions of the MV Act, 1939 and MV
F
Act, 1988 shows that the latter has merely replaced the former. The
special provisions relating to the State Transport Undertakings which
are contained in Chapter VI of the MV Act, 1988 are pari-materia with
those of Chapter IV-A of the MV Act, 1939 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
G
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
H the deprivation of the balance of the period of the permit. No acquisi-
.
;
V.K. SHARMA v. STATE OF KARNATAKA
619
tion of the vehicles or the paraphernalia connected with such vehicles is
en visaged as is the case under the Karnataka Act. I 634G; 635E-G]
3.2 Section 1)8 of the MV Act 1988 in terms clearly states (as
A
did Section 68B of the MV Act 1939) that Chapter VI relating to the
special provisions about the State Transport Undertaking and the rules· B
and orders made thereunder, shall have effect notwithstanding anything inconsistent therewith contained in Chapter V or in any other law
for the time being in force or in any instrument having effect by virtue
of any snch 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--mmplete
or partial of other persons, the provisions of ss. 74 and 80 would have
no application, and the private transport operators cannot apply for the
grant of contract carriage permits under s. 80 nor can such permits be
granted by the Transport Authority. The MV Act 1988 thus also makes
a provision for nationalisation of routes, and envisages a denial of
permits to private operators when routes are so nationalised. Hence it
cannot be said that there was a conflict between the provisions of the
Karnataka Act and the M. V. Act, 1988. [637H; 638D]
4. 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 th~ same matter. If it is open to resolve the conflict
between two entries in different Lists, viz., the Union and the State List
c
D
E
F
by examining the dominant purpose and therefore the pith and substance of the two legislations, there is no reason why the repugnancy
under Article 254 of the Constitution between the provisions of the two
G
legislations under different entries in the same List, viz. the Concurrent
List should not be resolved by scrutinizing the same by the same touchstone. What is to be ascertained in each case is whether the legislations
are on the same 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. [639E-H]
H
620
SUPREME COURT REPORTS
(1990] 1 S.C.R.
A
Meghraj & Ors. v. Allahrakhiya & Ors., AIR 1942 FC 27 y
distinguished.
B
c
Per K. Ramaswamy, J. (Dissenting)
l. Section 14(1) of Karnataka Contract Carriages (Acquisition)
Act, 1976 to the extent of prohibiting to make fresh application for
grant of permits to run the contract carriages other than those acquired
under that Act and the embargo and prohibition created under s. 20(3)
thereof on the respective Regional Transport Authority in the State of
Karnataka to invite/receive the application to consider the grant of
permits to such contract carriages according to law, are void. [686C-D]
2.1 The Parliament and the legislature of a State derive their
exclusive power to legislate on a subject/subjects in List I and List II of
Seventh SChedule to the Constitution from Art. 246(1) and (3) respectively. Both derive their power from Art. 246(2) to legislate upon a
D
matter in the Concurrent List III subject to Art. 254 of the Constitution.
The entries in the three lists merely demarcate the legislative field or
legislative heads. Their function is not to confer powers on either the
Parliament or the State Legislature. [682E-D]
Subrahmanyam Chettiar v. Muttuswami Goundan., AIR 1941 FC
E 47; Governor General in Council v. The Reliegh Investment Co. Ltd.,
[1944] FCR 229; Harakchand Ratanchand Banthia v. Union of India,
(1970] l SCR 479 AND Union of Inida v. H.S. Dhillon, [1972] 2 SCR
33, referred to.
F
G
2.2 Clause (1) of Art. 254 posits as a rule that in case of
repugnancy or inconsistency between the State Law and the Union Law
relating to the same matter in the Concurrent List occupying the same
field, the Union law shall prevail and the State law will fail to the extent
of the repugnancy or inconsistency whether the Union law is prior or
later in point of time to the State law. To this general rule, an exception
has been engratled in cl. (2) thereof, viz., provided the State law is
reserved for consideration of the President and it has received his
assent, and then it will prevail in that State notwithstanding its
repugnancy or inconsistency with the Union law. This exception again is
to be read subject to the proviso to cl. (2) thereof, which empowers the
Parliament to make law afresh or repeal or amend, modify or vary the
repugnant State law and it became_ void even though it received PresiH dent's assent. [659D-F]
I ;--.
V.K. SHARMA v. STATE OF KARNATAKA
621
.""-,{~
2 .. 1 The question of repugnancy under Article 254 of the Con-
\
stitution arises when the provisions of both laws are fully inconsistent or
are absolutely irreconcilable and it is impossible to obey without disobeying the other, or conflicting results are produced when both the
statutes covering the same field are applied to a given set of facts. It
matters little whether the provisions fall under one or other entry in the
Concurrent I ,ist. The substance of the same matter occupying the sa1ne
field by both the pieces of the legislation is material and not the form.
The repugnancy to be found is the repugnancy of the provisions of the
two laws and not the predominant object of the subject matter of the
two laws. The proper test is whether effect can be given to the provisions of
both the laws or whether both the laws can stand together. If both the pieces of
legislation deal with separate and distinct matters though of cognate and allied
character repugnancy does not arise. [660A-B; 675B.C; 660C; 674H; 675A]
Tika Ramji v. State of U.P .• [1956] SCR 393; A.S. Krishna v.
Madras State, [1957] SCR 399; Prem Nath Kaul v. State of J & K.
A
B
c
[ i952] 2 Supp. SCR 273; Bar Council of U.F. v. State of U.P., [1973] 2
SCR 1073; Deep Chand v. State of V.P., [1959] Supp. 2 SCR 8; State of 0
Orissa v. M.A. Tulloch & Co., [1964] 4 SCR 461; State of Assam v.
Horizon Union, [1967] I SCR 484; State of J & K v. M.S. Farooqi,
[1972] .I SCR 881; Kera/a State Electricity Board v. Indian Aluminium
Co.. [ 1976] I SCR 552; Basu's Commentary on the Constitution of
India (Silver Jubilee Editinn) Volume K 144; Clyde Engineering Co. v.
Cowburn, [1926] 37 CLR 466; Hume v. Palmer, [1926] 38 CLR 441;
E
Brisbane Licensing Court, [1920] 28 CLR 23; Colvin v. Bradley Bros.
Pvt. Ltd., [1943] 68 CLR 151; In Re Ex Parte Maclean, [1930] 43 CLR
472; Wenn v. Attorney General (Victoria), [1948] 77 CLR 84; O'Sullivan
v. Noarlunga Meat Co. Ltd., [1954] 92 CLR 565; O'Sullivan v.
Noarlunga Meat Co. Ltd., [1957] AC l and Blackley v. Devondale
Cream (Vic.) Pvt. Ltd., [1968] ll7 CLR 253, referred to.
F
2.4 Section 14 read with s. 20 of th.e Acquisition Act freezed the
right of a citizen to apply for and to obtain permit or special permit to
run a contract carriage in terms of the permit and monopoly to run a
contract carriage was conferred on the S. T. U., Karnataka. But the
M. V. Act, 1988 evinces its intention to liberalise the grant of contract G
carriage permit by saying in s. 80(2) that the Regional Transport
Authority "shall not ordinarily refuse to grant the permit". It also
confers the right on an applicant to apply for and authorises the
Regional Transport Authority to grant liberally contract carriage
permit except in the area covered by s. 80(3) and refusal appears to be
an exception, that too, obviously for reasons to be recorded. It may be
H
622
SUPREME COURT REPORTS
[ 1990] 1 S.C.R.
A rejected if the permit applied for relate to an approved or notified ·y
route. The M.V. Act accords the right, while the Acquisition Act,
negates and freezes the self-same right to obtain a permit and to run a
contract carriage and prohibits the authorities to invite or entertain an
application and to grant a permit to run contract carriage. The Act anrl
the relevant rules cover the entire field of making an application in thr
B
prescribed manner and directs the Regional Transport Authority to
,iii
grant permit with condition attached thereto to run contract carriages
..
vide ss. 66(1), 73, 74 and 80. Thus the existence of two sets of provisions
in the Motor Vehicles Act 59 of 1988 and Acquisition Act 21of1976 is
sufficient to produce conflicting results in their operation .in the same
occupied filed. The two sets of provisions run on collision course,
C 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 Acquisi"
)~
tion Act are repugnant and inconsistent toss. 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 to make or invite
D an application and injuction 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. [682H; 683E]
3.1 The Parliament with a view to lay down general principles
makes law or amends the existing law. The State Legislature still may
E feel that its local conditions may demand amendment or modification of
the Central Law. Their reserve power is Art. 254(2). After making the
Act 59 of 1988 the power of the State Legislature under Art. 254(2) is not
exhansted and is still available to be invoked from time to time. But
unless it again enacts law and reserves it for consideration and obtains
the assent of the President afresh, there is no prohibition for the
F
petitioners to make applications for the grant of contract carriage permits
under the Act and consideration and grant or refusal thereof according
to law by the concerned Regional Transport Authority. [685E; 686B]
3.2 The Karnataka State Legislature is, therefore, at liberty to make
afresh the law similar toss. 14(1) and 20(3) of the Acquisition Act with
G appropriate phraseology and to obtain the assent of the President. [686B]
4. Parliament may repeal the State law either expressly or by
necessary implication but Courts would not always favour repeal by
implication. Repeal by implication may be found when the State law is
repugnant or inconsistent with the Union law in its scheme or operaH tion. The principle would be equally applicable to a question under
'-
1, ..
V.K. SHARMA v. STATE OF KARNATAKA
623
Article 254(2) of the Constitution. In the instant case, s. 217(1) of the A
Union law does not expressly repeal ss. 14(1) and 20(3) of the State law.
They are repugnant with the Union law. '[676C-D; 670E-F; 669F]
i
Zaveribhai v. State of Bombay, [1955] l SCR 799; M .
.. Karunanidhi v. Union offndia, [1979] 3 SCR 254; T. Barai v. Henry
B
· Ah Hoe, [1983] l SCR 905 and Mis Hoechst Pharmaceuticals Ltd. v.
·· State of Bihar, [1983] 3 SCR 130, referred to.
5. For the applicability of the principle that special law prevails
over the general law, the special law must be valid law in operation.
Voidity of law obliterates it from the statute from its very inception. In
the instant case, since ss. 14(1) and 20(3) are void the said principle is
C
~ · not applicable. [683FI
Justiniano Augusto De Peidada Barreto v. Antonia Vicente De
Fonseca & Ors., [1979] 3 SCR 494, distinguished.
6.1 The doctrine of pith and substance or the predominant
purpose or true nature and character of law is applied to determine
" whether the impugned legislation is within the legislative competence
•" under Arts. 246( 1) and 246(3) of the Constitution, and to resolve the
conflict of jurisdiction. If the Act in its pith and substance falls in one
~- List it must be deemed not to fall in another List, despite incidental
" ' encroachment and its validity should be determined accordingly. The
!' pith and substance rule, thereby, resolves the problem of overlapping o!
''any two entries of two different Lists vis-a-vis the Act" on the basis of
an inquiry into the "true nature and chafacter" of the legislation as a
whole and tries to find whether the impugned law is substantially within
the competence of the Legislature which enacted it, even if it incidentally
trespasses into the legislative field of another Legislature. [680C; 677~'; 678A I
6.2 The doctrine has no application when the matter in question
is covered by an entry or entries in tlie Concurrent List and has occupied
the same field both in the Union and the State Law. It matters little as to
in which entry or entries in the Concurrent List the subject-matter falls
or in exercise whereof the Act/provision or provisions therein was
made. The Parliament and Legislature of the State have exclusive power
to legislate upon any subject or subjects in the Con_!'urrent List. The
question of incidental or ancillary encroachment or to trench into
forbidden field does not arise. The determination of its 'true nuture and
chracter' also is immaterial. [680C-D I
D
E
F
G
H
A
B
c
SUPREME COURT REPORTS
[1990] I S.C.R., j
Prafulla Kumar v. Bank of Commerce, Khulna, AIR 1947 PC 60; "
State of Bombay v. F.N. Balsara, [1951] SCR 682; Atiabari Tea Co.
Ltd. v. State of Assam, [1961] 1 SCR 809 and Meghraj & Ors. v.
Allaharakhiya & Ors., AIR 1942 FC 27, referred to.
ORIGINAL JURISDICTION: Writ Petition No. 723 of
etc.
(Under Article 32 of the Constitution oflndia).
G. Ramaswamy, Additional Solicitor General (N.P.), F.S. Nari-
~
man, G.L. Sanghi, G .. Prabhakar, M. Rangaswamy, N.D.B. Raju, Ms.
~
C.K. Sucharita, S.K. Agnihotri, P.R. Ramashesh, K.R. Nagaraja and
~
Ms. Anita Sanghi for the appearing parties.
.;-:
The following Judgments of the Court were delivered:
RANGANATH MISRA, J. I have the benefit of reading the
D
judgment prepared by my esteemed brethren Sawant and K. Ramaswamy, JJ. Brother Sawant has 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 ·d
E interesting question has arisen and in looking to the two judgments I '1
have found additional reasons to support the conclusion of Sawant, J., 'ii
I proceed to indicate the same in my separate judgment.
i
These applications under Article 32 of the Constitution by a
group of disgruntled applicants for contract carriage permits call in
F question action of the concerned transport authorities in not entertaining their applications under the provisions of the Motor Vehicles Act,
1988.
Motor Vehicles Act (4 of 1939) made provision for grant of contract carriage permits. The Karnataka Contract Carriages (AcquisiG tion) 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 <.•r subservient thereto. and the preamble
H stated;
y
-
V.K. SHARMA v. STATE OF KARNATAKA [MISRA, J.[
625
"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 subserve the common good and that the operation
of the economic system does not result in the concentration
of wealth and means of production to the commort detri'
ment;
And whereas for the aforesaid purposes ii 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
subserv.ienl thereto . ..... "
A
'C
D
_,y·
Section 2 contains the declaration to the following effeci:
--<
"It is hereby declared that this Aci is for giving effect to the
policy of the State towards securing the principles specified
E
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.sectioh 4."
tJrtder s, 4 contract carriages owned or operated by contrai;t
carriage operators along with the respective permits ahd/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 ot renewal of existing permits for
running of any contract carriage in the State by any private operator
and all pendirtg proceedings in relation to grahi 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 carria~s within the State to the exclusion of atiy provision tinder
the 1939 Act.
The vires of the Act was the subject-matter of the decision of this
H
626
SUPREME COURT REPORTS
[1990) 1 S.C.R.
A Court in a group of appeals in the case of the State of Karnataka & y
Anr. v. Shri Ranganatha Reddy & Anr., [1978) 1 SCR 641. A SevenJudge 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
B 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
(
c
E
F
G
Art. 254(2) of the Constitution.
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.
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. Whiles. 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.
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
H rightly refused to entertain the petitioners' applications.
-
-
V.K. SHARMA v. STATE OF KARNATAKA \MISRA. J.]
627
Y
The question for consideration is: Whether Art. .~54( I) of the
Constitution applies to the situation in hand and whether s. 20 of the
Karnataka Act being inconsistent with the provisions of ss. 73, 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
Con_current 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
'.
1· '· and added a proviso to clause (2) of Art. 254 to meet the difficulties
~
experienced in the intervening years. The Article reads thus:
"254( I) 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 matters 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 Jaw made by the
Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a Jaw 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 Pre.sident and has received his
assent, prevail in that State:
Provided that nothing in this clause shall prevent
Parliament from enacting at any time any Jaw with respect
to the same matter including a law adding to, amending,
varying or repealing the Jaw so made by the Legislature of
the State."
A
B
c
D
E
F
G
H
628
SUPR.EME COURT REPORTS
[1990] 1 S.C.R.
A
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 m;id.er the Concurrent List: Bar Council of Uttar Pradesh v.
State of U. P. & Anr., [ 1973] 2 SCR 1073 and Kera/a State Electricity
B
Board v. Indian Aluminium Company, [ 1976] l SCR 552.
This Court in Deep Chand v. State of Uttar Pradesh & Ors.,
[1959] 2 Suppl. SCR 8; T. Barai v. Henry Ah Hoe & Anr., [1983] 1
SCR 905 and Hoechst Pharmaceutica/s1Ltd. & Anr. v. State of Bihar &
Ors., [ 1983] 3 SCR 130 has laid down that cl. ( l) of Art. 254 lays down
C the general rule and cl. (2) is an exception 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
D State Act had overriding effect.
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 1988 came later and it is contended that the State
legislation has provisions repugnant to provisions made in the 1988
E 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.
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
F. 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
G
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.
'(he lang1,iage qf cl. (2) is also similar though applicable in a,
different situation. Apparently in· one sense bot.h t))e clauses operate
H; on a similar level though ip dissimilar context. In cl. (2) what is reley
'(
V.K. SHARMA v. STATE OF KARNATAKA {MISRA, J.]
629
vant is the words: 'with respect to that matter'. A Constitution Bench
of this court in Zaverbhai Amaidas v. State of Bombay, I 1955) 1 SCR
799 emphasised that aspect. Venkatarama Ayyar, J. pointed out:
"The important thing to consider with reference to
A
this provision is whether the legislation is 'in respect of the
same matter'. If the later legislation deals not with the
B
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."
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, I 1979) 3 SCR 254)' At p. 263 of the
Reports, it has been said:
"It would be seen that so far as clause ( l) 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 provisions 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 Legislatures.