Validity of the 2003 Repeal Act – Upheld. The Supreme Court ruled that the Karnataka Legislature had full competence to repeal the 1976 Act without requiring fresh Presidential assent. The repeal was justified by the need for transport liberalization and increased private participation.

Delegation of Permit-Granting Power – Allowed. The Court held that Section 68(5) of the Motor Vehicles Act and Rule 56(1)(d) of the Karnataka Motor Vehicles Rules authorized the STA to delegate contract carriage permits to the Secretary, STA.

Legislative Competence – The power to repeal is coextensive with the power to enact; hence, the Karnataka Legislature had the authority to repeal the 1976 Act.

Separation of Powers – Delegation of quasi-judicial functions is permissible if expressly provided by law.

Public Policy & Administrative Efficiency – The delegation of routine permit-granting functions ensures smoother operations in the transport sector without compromising oversight.

Appeals of private bus operators and Karnataka State Road Transport Authority (STA) – Allowed. KSRTC's appeal – Dismissed. High Court ruling on delegation – Set aside. Direction to Authorities – Ensure efficient implementation of delegated permit-granting powers while maintaining statutory oversight.

Acts and Sections Discussed:

• Constitution of India, 1950 – Article 39(b) & (c) – Directive Principles of State Policy.
• Motor Vehicles Act, 1988 – Section 68(5) – Delegation of powers by the State Transport Authority (STA).
• Karnataka Motor Vehicles Rules, 1989 – Rule 56(1)(d) – Power of STA to delegate permit issuance.
• Karnataka Contract Carriages (Acquisition) Act, 1976 – Repealed by the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003.
• General Clauses Act, 1897 – Legislative power to repeal statutes.

Subjects:

Transport Permits – Legislative Competence – Delegation of Power – Contract Carriages – Quasi-Judicial Functions – Public Transport Policy – Repeal Validity – Administrative Efficiency – State Transport Authority – Private Operators.

Facts:

a. Nature of the Litigation – The case concerns the constitutional validity of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repealed the Karnataka Contract Carriages (Acquisition) Act, 1976, and the delegation of permit-granting powers to the Secretary, State Transport Authority.

b. Who is Asking the Court and for What Remedy?

• Private bus operators – Challenged the Karnataka High Court’s decision that disallowed the delegation of permit-granting powers.
• Karnataka State Road Transport Corporation (KSRTC) – Sought to invalidate the 2003 Repeal Act, arguing that the repeal was unconstitutional.

c. Reason for Filing the Case – KSRTC opposed the repeal of the 1976 Act, contending that it overruled Supreme Court precedents and required fresh Presidential assent. Private operators sought reinstatement of the delegated authority to the Secretary, STA, for granting contract carriage permits.

d. What Has Been Already Decided Until Now?

• The Karnataka High Court ruled that:
  1. The repeal of the 1976 Act was unconstitutional.
  2. The Secretary, STA, could not be delegated the power to grant contract carriage permits.

Issues:

1. Constitutional Validity of the 2003 Repeal Act – Whether the Karnataka Legislature had the authority to repeal the 1976 Act without fresh Presidential assent.
2. Delegation of Power to the Secretary, STA – Whether contract carriage permits, being quasi-judicial in nature, could be delegated to a single officer.

Submissions/Arguments:

• KSRTC's Contentions:

  • The 2003 Act required Presidential assent since the 1976 Act had been enacted under Entry 42 of the Concurrent List.
  • Granting transport permits is a quasi-judicial function and must be exercised only by multi-member transport authorities.
  • The repeal disrupted the state-controlled transport framework, affecting KSRTC's financial sustainability.

• Private Bus Operators & Karnataka STA's Contentions:

  • The Legislature had the power to repeal the 1976 Act as per the principle that the authority to enact includes the power to repeal.
  • Section 68(5) of the Motor Vehicles Act, 1988, read with Rule 56 of the Karnataka Motor Vehicles Rules, 1989, expressly allowed delegation.
  • The delegation of routine permits ensured administrative efficiency and faster service.