2025 INSC 152 CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 1 of 46

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.002181-002182 OF 2025

@ SLP(CIVIL) NOS.27833-27834 OF 2011

M/S S.R.S. TRAVELS

BY ITS PROPRIETOR

K.T. RAJASHEKAR …APPELLANT(S)

VERSUS

THE KARNATAKA STATE

ROAD TRANSPORT

CORPORATION

WORKERS & ORS. …RESPONDENT(S)

WITH

CIVIL APPEAL NOS………………………OF 2025

@SLP(CIVIL) NOS.25787-25956 OF 2012

WITH

CIVIL APPEAL NOS………………………OF 2025

@SLP(CIVIL) NOS.32499-32525 OF 2011

J U D G M E N T

VIKRAM NATH, J.

1. Delay, if any, is condoned.

2. Leave granted.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 2 of 46

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.

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.”

1

The 1950 Act

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 3 of 46

• The Karnataka State Road Transport

Corporation will be referred to as “ the

Respondent Corporation” or “KSRTC.”

4. The facts leading to the present appeals are as

follows:

4.1. Enactment of the 1976 Act (Karnataka

Contract Carriages (Acquisition) Act, 1976

2

)-

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.

2

The KCCA Act

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 4 of 46

4.2. The Act was challenged but upheld by this

Court in State of Karnataka v. Ranganatha

Reddy

3

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, 1988

5 was enacted by the

Parliament. This Act contains several provisions

relevant to the present matter: Section 2(7)

defines “Contract carriage” and Section 2(40)

defines “Stage Carriage.” Moreover, Section 68

deals with transport authorities; in particular,

Section 68(2) provides for the composition of the

State Transport Authority

6 and the Regional

Transport Authority

7, mandating that each

3

AIR 1978 SC 215

4

AIR 1990 SC 2072

5

MV Act

6

STA

7

RTA

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 5 of 46

include a Chairman with judicial experience

along with other members—up to four for the

STA and up to two for the RTA. Section 68(3)(b)

empowers the STA to perform the duties of the

RTA, and Section 68(5) enables both

authorities, under rules made pursuant to

Section 96, to delegate their powers and

functions to any other authority or person

subject to prescribed restrictions.

4.4. On 1 July 1989, the Karnataka Motor Vehicle

Rules, 1989

8 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

8

KMV Rules

9

(1990) 2 SCC 562

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 6 of 46

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,

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

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2003

10. Among other amendments (notably to

taxation laws), Section 3 of the 2003 Repeal Act

repealed the 1976 KCCA Act. According to the

Statement of Objects and Reasons appended to

the 2003 Act, the legislative intent was to

liberalize public transport, encourage private

operators, and address “woeful shortages” in

passenger services. The Legislature believed

that removing the KCCA Act’s prohibitions

would enable better competition, expanded

services, and ultimately greater passenger

comfort.

4.7. Challenge Before the High Court of

Karnataka- After 2003, private bus operators

began applying for contract carriage permits

under the more liberal regime. In some

instances, Secretaries of the STA or RTAs

granted these permits, relying on purported

delegations under Rule 56. Meanwhile, KSRTC

and its employees’ federation filed various writ

petitions challenging (a) the validity of the 2003

Repeal Act and (b) the power of the Secretaries

10

The 2003 Repeal Act or Karnataka Act No.9 of 2003

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 8 of 46

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 is sue 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

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President’s assent. Since the KCCA Act falls

under Entry 42 of the Concurrent List in the

Seventh Schedule of the Constitution, Act No.

9/2003 was required to be sent for the

President’s assent. It further noted that, by

repealing the KCCA, the objective of the State

Transport Undertaking could not be achieved,

and that the issue could have been resolved by

granting additional permits to the State

Transport Corporation.

4.9. Reference to Division Bench- Ultimately,

appeals (W.A. Nos. 5466/2004, 60/2005, and

connected matters) were placed before a

Division Bench. The Division Bench

consolidated multiple challenges to the 2003

Repeal Act, as well as the dispute about whether

the Secretary, STA could lawfully grant permits.

4.10. Vide order dated 28.03.2011, the Division

Bench of the High Court gave the following

findings with respect to the main issues in these

matters:

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 10 of 46

• 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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 11 of 46

issuance to the Secretary. It held that permit-

granting under Chapter V is a quasi-judicial

function requiring collective adjudication or at

least decision-making by the statutory

authority itself. The High Court thus

invalidated the relevant portion of the KMV

Rules (Rule 56) or, more precisely, the manner

in which the STA had invoked it. The Division

Bench concluded that the “Secretary alone”

approach improperly bypassed the multi-

member scheme envisaged by the MV Act.

4.11. Aggrieved by the Division Bench’s order dated

28.03.2011, the private bus operators and the

Karnataka STA; and the KSRTC, filed Special

Leave Petitions before this Court, leading to the

present appeals with the following main

contentions:

• SLP (C) Nos. 27833-27834 of 2011: Filed by

private bus operators, challenging the High

Court’s ruling that prohibits delegation of

permit-granting powers to the Secretary,

STA/RTA. These appellants accept the High

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

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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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 13 of 46

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

state-owned road transport corporations such as

KSRTC.

Judicial Endorsement- The 1976 Act was upheld

by this Court in State of Karnataka v.

Ranganatha Reddy

11 and later reaffirmed in

Vijayakumar Sharma v. State of Karnataka

12.

These decisions recognized that the statutory

objective, furthering the Directive Principles under

Article 39(b) and (c) of the Constitution, did not

violate any fundamental or constitutional rights.

11

AIR 1978 SC 215

12

(AIR) 1990 SC 2072

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 14 of 46

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 15 of 46

Court held that there was no requirement of fresh

Presidential assent for the repeal, and it affirmed

that the State Legislature was competent to affect

such a repeal.

III. Motor Vehicles Act, 1988

Chapter V: Control of Transport Vehicles

Section 66: No owner can use or permit the use of

a transport vehicle without a valid permit.

Section 68(3): Enumerates the powers and

functions of the STA and RTA, including the grant

of various permits.

Section 68(5): Permits the STA or RTA, “if

authorised by the Rules made under Section 96,”

to delegate any of its powers or functions to any

other authority or person, subject to prescribed

conditions.

Chapter VI: Special Provisions Relating to State

Transport Undertakings (for completeness)- While

primarily not at issue in these appeals, Chapter VI

establishes procedures for formulating schemes

granting exclusive rights to State Transport

Undertakings. This chapter was relevant in the

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 16 of 46

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.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 17 of 46

6. In light of the foregoing factual matrix and the

contentions urged before us, the following principal

issues arise for determination:

I.Validity of the 2003 Repeal Act : Whether the

2003 Repeal Act repealing the KCCA Act is

constitutionally valid, particularly given that the

1976 Act had earlier been upheld by this Court.

II.Delegation of Power to Grant Permits: Whether,

under Section 68(5) of the MV Act, read with Rule

56 of the KMV Rules, the STA and RTAs can

lawfully delegate the power to grant contract

carriage permits (and related permits) to the

Secretary, or whether such power must remain

with the multi-member authorities due to its quasi-

judicial character.

7. The learned Senior Counsel for the Appellants,

Mr. Devadatt Kamat 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 that the STA and

any RTA, if authorised under rules made

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 18 of 46

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 19 of 46

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 20 of 46

permissible if rules are framed under Section 96

of the MV Act. The Appellants argued that the

latter view reflects the true statutory scheme.

They submitted that by incorporating

amendments to the KMV Rules (notably, the

inclusion of Section 96), the State has

unambiguously affirmed its intention to

delegate routine functions, such as the issuance

of contract carriage permits, to the Secretary.

7.5. Delegation Does Not Subvert Judicial

Oversight: It is submitted that even if the power

to grant permits were quasi -judicial, such

functions can be delegated provided the

enabling statute expressly permits it. The

Appellants have relied on the recent decision in

Newtech Promoters & Developers Private

Limited v. State of Uttar Pradesh &

Others

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,

13

(2021) 18 SCC 1

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 21 of 46

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 transpo rt

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 22 of 46

which no contract carriage permits were issued

by the STA or RTA, and that alternative

transport services adequately served the public

interest. They argue that the 1976 Act, enacted

under Entry 42 and with Presidential assent,

created exclusive rights for KSRTC, and its

repeal was a deliberate statutory measure that

should not be overturned.

8.2. Incompatibility of the 2003 Act with

Constitutional Requirements: The learned

Senior Counsel contends that the 2003 Act

repeals the 1976 Act by invoking Entry 57 of List

II (taxation on vehicles), which deals with a

matter entirely distinct from acquisition. Since

the parent 1976 Act was enacted under Entry

42 and with Presidential assent, its repeal or

amendment should likewise be affected under

the same constitutional basis. The State

Legislature’s attempt to repeal it indirectly via a

taxation measure violates the constitutional

scheme and is thereby ultra vires.

8.3. Undermining of Judicial Precedents and

Public Policy: The Respondent Corporation

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Page 23 of 46

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 24 of 46

repeal imposed an undue financial and

operational burden on KSRTC, jeopardizing its

economic viability and contravening the very

objectives for which the 1976 Act was enacted.

8.5. On the Non-Delegability of the Power to Issue

Permits: The Respondent Corporation concurs

with the High Court’s holding that the power to

grant Contract Carriage Permits is a quasi-

judicial function, expressly vested in the STA or

the RTA as composite bodies. The relevant

provisions of the MV Act, particularly Sections

68, 69, and 74, together with Rule 56 of the

KMV Rules clearly indicate that the power to

issue such permits is intended to be exercised

by a multi-member body and not by a single

officer.

8.6. Inadmissibility of Delegation to a Single

Officer: It is submitted that delegation of the

permit-granting power to the Secretary (or any

prescribed officer) is contrary to the statutory

scheme. Such a delegation would effectively

replace the collective decision-making process

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 25 of 46

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-

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 26 of 46

making power must be strictly confined to the

framework provided by the parent Act.

8.8. Legislative Intent and Judicial Oversight:

The Respondent Corporation further contends

that the legislative intent was unambiguously

to vest the power of granting Contract Carriage

Permits in a body of high-ranking officials,

whose collective judgment is essential to ensure

transparency and prevent arbitrary decisions.

The delegation of this power to the Secretary, an

officer whose duties and responsibilities are

otherwise circumscribed, is therefore contrary

to both the letter and the spirit of the MV Act

and the KMV Rules.

8.9. Post-Judgment Developments (Ancillary

Submissions): Subsequent to the repeal of the

1976 Act, there has been a resurgence of misuse

wherein private operators, under the guise of

Contract Carriage Permits, have operated their

vehicles as stage carriages. This misuse has led

to seizures, penalties, and significant financial

losses to the State and KSRTC.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 27 of 46

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,

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 28 of 46

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

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 29 of 46

intention was to dismantle the statutory monopoly

that the KCCA Act had created for the KSRTC and to

open the door for private operators to address the

burgeoning public transport needs.

12. The Preamble to 2003 Repeal Act reads as

follows:

“An Act further to amend the Karnataka

Motor Vehicles Taxation Act, 1957 and to

repeal the Karnataka Contract Carriages

(Acquisition) Act, 1976.

Whereas it is expedient further to amend

the Karnataka Motor Vehicles Taxation

Act, 1957 (Karnataka Act 35 of 1957) and

to repeal the Karnataka Contract

Carriages (Acquisition) Act,1976

(Karnataka Act 21 of 1976) for the

purposes hereinafter appearing;”

Moreover, the Statement of Objects and Reasons of

this act reads as follows:

“STATEMENT OF OBJECTS AND

REASONS

(As appended to at the time of

Introduction)

It is considered necessary to amend the

Karnataka Motor Vehicles Taxation Act,

1957 (Karnataka Act 35 of 1957) and to

repeal the Karnataka Contract Carriages

(Acquisition) Act, 1976 (Karnataka Act 21

of 1976) to give effect to the proposals

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 30 of 46

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.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 31 of 46

14. Furthermore, the 2003 Repeal Act is rooted in

the practical realities of modern transport policy.

Contemporary challenges, such as increasing

demand for public transport services, congestion in

urban areas, and the need for efficient service

delivery, necessitated a more flexible regulatory

regime. The legislative history and the Statement of

Objects and Reasons attached to the 2003 Repeal Act

make it clear that the Legislature intended to remedy

the inefficiencies of the past by introducing

competition into the transport sector. The repeal of

the KCCA Act was thus a deliberate policy decision

aimed at fostering a more dynamic and responsive

transport framework rather than an attempt to

nullify well-established judicial pronouncements.

15. Additionally, it has been held on various

instances by this Court that a Legislature may,

subject to constitutional limitations, repeal any law it

has enacted. In Ramakrishna v. Janpad Sabha

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. The

14

AIR 1962 SC 1073

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 32 of 46

relevant paras of this judgement have been

reproduced hereunder:

“13. It must however be observed that

merely because the legislature is

empowered under this entry to constitute

local authorities and vest them with

powers and jurisdiction it would not follow

that these local bodies could be vested

with authority to levy any and every tax for

the purpose of raising revenue for the

purposes of local administration. They

could be validly authorised to raise only

those taxes which the province could raise

under and by virtue of the relevant entries

in the Provincial Legislative List. This is on

the principle that the province could not

authorise local bodies created by it to

impose taxes which it itself could not

directly levy for the purposes of the

Provincial Government. Now comes the

question whether the Provincial Legislature

was competent, by legislation, to

discontinue the levy of the tax by effecting

a repeal of the taxing provision contained

in the Local Self Government Act of 1920.

There is no doubt that the general principle

is that the power of a legislative body to

repeal a law is co extensive with its power

to enact such law, as would be seen from

the following passage in the judgment by

Lord Watson in Attorney-General for

Ontario v. Attorney-General for the

Dominion [(1896) AC 348 at p. 366] :

“Neither the Parliament of Canada nor the

Provincial Legislatures have authority to

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 33 of 46

repeal statutes which they could not

directly enact.”

But obviously it application in particular

instances would be controlled by express

constitutional provision modifying the

same. We have such a provision in the case

on hand in Section 143(2) of the

Government of India Act, 1935. In the

context the relevant words of the sub-

section could only mean “may continue to

be levied if so desired by the Provincial

Legislature” which is indicated by or is

implicit in the use of the expression “may”

in the clause “may be continued until

provision to the contrary is made by the

Federal Legislature”. This would therefore

posit a limited legislative power in the

province to indicate or express a desire to

continue or not to continue the levy. If in the

exercise of this limited power the province

desires to discontinue the tax and effects a

repeal of the relevant statute the repeal

would be effective. Of course in the

absence of legislation indicating a desire to

discontinue the tax, the effect of the

provision of the Constitution would be to

enable the continuance of the power to levy

the tax but this does not alter the fact that

the provision by its implication confers a

limited legislative power to desire or not to

desire the continuance of the levy subject

to the overriding power of the Central

Legislature to put an end to its continuance

and it is on the basis of the existence of this

limited legislative power that the right of

the Provincial Legislature to repeal the

taxation provision under the Act of 1920

could be rested. Suppose for instance, a

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 34 of 46

Provincial Legislature desires the

continuance of the tax but considers the

rate too high and wishes it to be reduced

and passes an enactment for that purpose,

it cannot be that the legislation is

incompetent and that the State

Government must permit the l ocal

authority to levy tax at the same rate as

prevailed on 1-4-1937, if the latter desired

the continuance of the tax. If such a

legislation were enacted to achieve a

reduction of the rate of the duty, “its

legislative competence must obviously be

traceable to the power contained in the

words” may continue to be levied in

Section 143(2) of the Government of India

Act. If we are right so far it would follow

that in the exercise of this limited

legislative power the Provincial Legislature

would also have a right to legislate for the

continuance of the tax provided, if of

course, the other conditions of Section

143(2) are satisfied viz. (1) that the tax was

one which was lawfully levied by a local

authority for the purposes of a local area at

the commencement of Part III of the

Government of India Act, (2) that the

identity of the body that collects the tax,

the area for whose benefit the tax is to be

utilised and the purposes for which the

utilisation is to take place continue to be

the same, and (3) the rate of the tax is not

enhanced nor its incidence in any manner

altered, so that it continues to be same tax.

If as we have held earlier there is a limited

legislative power in the province to enact a

law with reference to the tax levy so as to

continue it, the validity of the Act of 1949

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 35 of 46

which manifested the legislative intent

to continue the tax without any break the

legal continuity being established by the

retrospective operation of the provision,

has to be upheld.”

16. The KCCA Act was enacted under Entry 42

(Acquisition and requisition of property), and its

repeal by the 2003 Repeal Act was effected under

Entry 57 of List II, which deals with taxation—a

subject area where the State has independent

legislative competence. The repeal does not alter or

contradict the judicial interpretation of the KCCA Act;

rather, it reflects a conscious legislative choice to

adapt to new economic and social conditions.

17. In view of these considerations, the rationale

underlying the 2003 Repeal Act is sound and

consistent with the principles of legislative power.

The arguments advanced by the Respondent

Corporation, that the repeal would amount to an

impermissible overruling of prior Supreme Court

decisions, that it violates the requirement of

presidential assent, or that it is otherwise beyond the

legislative competence of the State, are untenable.

The legislative intent, as clearly articulated in the

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 36 of 46

2003 Repeal Act, was to improve public transport

services and to rectify the shortcomings of the earlier

regulatory regime. Accordingly, we hold that Section

3 of the Karnataka Motor Vehicles Taxation and

Certain Other Law (Amendment) Act, 2003, which

repeals the KCCA Act, is constitutional. The KSRTC

challenging the repeal on these grounds have failed

to establish any defect in the exercise of the

Legislature’s power.

18. In view of the foregoing analysis, we concur with

the view taken by the Division Bench of the High

Court on this issue. We hold that Section 3 of the

Karnataka Motor Vehicles Taxation and Certain

Other Law (Amendment) Act, 2003, which repeals the

KCCA Act, is constitutional, and the State Legislature

has rightly exercised its power to repeal the Act.

ISSUE II- DELEGATION OF POWER TO GRANT

PERMITS

19. The next issue before us is whether the STA has

the power to delegate its functions, specifically, the

issuance of contract carriage, special, tourist, and

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 37 of 46

temporary permits, to its Secretary. In this regard,

the statutory framework provides clear guidance.

20. Section 68(5) of the Motor Vehicles Act, 1988

states:

"The State Transport Authority and any

Regional Transport Authority, if authorised

in this behalf by rules made under Section

96, may delegate such of its powers and

functions to such authority or person

subject to such restrictions, limitations and

conditions as may be prescribed by the

said rules."

This provision unambiguously confers upon the STA

and RTA the power to delegate its functions provided

that rules are framed under Section 96 of the Act. In

the present context, the delegation in question

concerns the grant of permits that are not stage

carriage permits. This is further clarified in Rule

56(1)(d) of the KMV Rules, which reads as follows:

"56. DELEGATION OF POWERS BY STATE

TRANSPORT AUTHORITY:

1. The State Transport Authority may, by a

general or special resolution recorded in its

proceedings, delegates:-

(d) its power to grant a permit other than a

stage carriage permit on an application

made to the Chairman or Secretary or any

officer of the Motor Vehicles Department

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 38 of 46

not below the rank of a Regional Transport

Officer with reference to the notification

issued under sub-section (2) of Section 69."

21. The language of Rule 56(1)(d) explicitly

differentiates between the grant of stage carriage

permits, which involve complex and inherently quasi-

judicial considerations, and other types of permits

that are essentially administrative in nature. The fact

that only the grant of stage carriage permits is

excluded from delegation underscores the

Legislature’s intention: routine and time-sensitive

permits such as contract carriage, special, tourist,

and temporary permits can be efficiently processed

through delegation to a competent officer like the

Secretary, thereby ensuring that administrative

functions are not unduly delayed by the need for a

full board’s involvement.

22. The Respondents argue that permit-granting is

a quasi-judicial function that must be exercised

solely by the composite body of the STA or RTA, as

such functions require deliberation by multiple high-

ranking officials, ensuring that decisions are made

with due consideration and dissenting opinions. They

contend that delegating this power to a single officer

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 39 of 46

would undermine the judicial character of the

decision-making process. However, this argument

does not withstand if we have a closer analysis of the

statutory provisions.

23. Firstly, even if one accepts that the grant of

permits has a quasi-judicial element, it is an

established principle of administrative law that

quasi-judicial functions may be delegated if the

enabling statute expressly provides for such

delegation. Here, Section 68(5) of the MV Act, coupled

with the specific language of Rule 56(1)(d) of the KMV

Rules makes it clear that the Legislature intended for

the STA to delegate certain routine permit functions.

The exclusion of stage carriage permits from this

delegation does not imply that all permit functions

are inherently non-delegable; rather, it reflects a

calibrated approach that distinguishes between

complex adjudicatory functions and routine

administrative tasks.

24. Secondly, from a practical standpoint, the STA

is entrusted with a wide range of responsibilities

under the Motor Vehicles Act, and its workload

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 40 of 46

necessitates delegation to ensure timely service

delivery. The Secretary, being a high-ranking officer

with substantial expertise in transport

administration, is well equipped to handle routine

permit applications. The delegation mechanism is not

a blank check for arbitrary decision-making; it

operates within the boundaries and conditions

prescribed by the enabling rules framed under

Section 96 of the MV Act. This ensures that, while

administrative efficiency is achieved, there remains

adequate oversight and accountability through the

broader STA framework.

25. Moreover, the High Court’s reasoning in this

regard appears to have conflated the inherent quasi-

judicial nature of certain decisions with the broader

statutory power of delegation. The High Court held

that because permit-granting is quasi-judicial, it

cannot be delegated to a single officer. However, this

view fails to recognize that delegation does not

remove judicial oversight from the process. Instead,

it merely streamlines routine functions that do not

require the full deliberative process of the STA. In

Newtech Promoters & Developers (P) Ltd. v. State

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 41 of 46

of U.P.

15

, this Court has affirmed that even quasi-

judicial functions may be delegated if the statute

provides for it and if appropriate safeguards are in

place. The relevant paras of this judgement are

reproduced hereunder:

“114. It is a well-established principle of

interpretation of law that the court should

read the section in literal sense and cannot

rewrite it to suit its convenience; nor does

any canon of construction permit the court

to read the section in such a manner as to

render it to some extent otiose. Section 81

of the Act positively empowers the

Authority to delegate such of its powers

and functions to any member by a general

or a special order with an exception to

make regulations under Section 85 of the

Act. As a consequence, except the power to

make regulations under Section 85 of the

Act, other powers and functions of the

Authority, by a general or special order, if

delegated to a Single Member of the

Authority is indeed within the fold of

Section 81 of the Act.

115. The further submission made by the

learned counsel for the promoters that

Section 81 of the Act empowers even

delegation to any officer of the Authority or

any other person, it is true that the

Authority, by general or special order, can

delegate any of its powers and functions to

15

(2021) 18 SCC 1

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 42 of 46

be exercised by any member or officer of

the Authority or any other person but we

are not examining the delegation of power

to any third party. To be more specific, this

Court is examining the limited question as

to whether the power under Section 81 of

the Act can be delegated by the Authority

to any of its member to decide the

complaint under Section 31 of the Act.

What has been urged by the learned

counsel for the promoters is hypothetical

which does not arise in the facts of the

case. If the delegation is made at any point

of time which is in contravention to the

scheme of the Act or is not going to serve

the purpose and object with which power

to delegate has been mandated under

Section 81 of the Act, it is always open for

judicial review.

116. The further submission made by the

learned counsel for the appellants that

Section 81 of the Act permits the Authority

to delegate such powers and functions to

any member of the Authority which are

mainly administrative or clerical, and

cannot possibly encompass any of the core

functions which are to be discharged by

the Authority, the judicial functions are

non-delegable, as these are the core

functions of the Authority. The submission

may not hold good for the reason that the

power to be exercised by the Authority in

deciding complaints under Section 31 of

the Act is quasi-judicial in nature which is

delegable provided there is a provision in

the statute. As already observed, Section

81 of the Act empowers the Authority to

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 43 of 46

delegate its power and functions to any of

its members, by general or special order.”

26. Lastly, the practical impact of not allowing

delegation would be to overload the STA with routine

functions, potentially causing undue delays and

inefficiencies in the permit-issuance process. Such

delays could disrupt the balance of public transport

service delivery, which the Legislature clearly sought

to improve by liberalizing the regime for non-stage

carriage permits. In this light, the delegation of

routine permit-granting powers is not only legally

permissible but is also necessary to meet the

practical demands of an evolving transport sector.

27. In view of the above analysis, we conclude that

the power of the STA to delegate the issuance of

contract carriage, special, tourist, and temporary

permits to its Secretary is fully supported by the

statutory provisions of Section 68(5) of the MV Act,

and Rule 56(1)(d) of the KMV Rules, 1989. The

delegation is a rational and necessary administrative

measure that facilitates prompt and efficient

processing of permit applications without

undermining the oversight function of the STA.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 44 of 46

Consequently, we reject the Respondents’ arguments

and hold that the High Court’s reasoning on the non-

delegability of permit-granting power is flawed. The

power to delegate, as provided by law, remains intact,

and any decision to the contrary is unsustainable in

light of both legislative intent and practical necessity.

28. In view of the discussions and analysis above,

we hold that:

(a) Section 3 of the Karnataka Motor Vehicles

Taxation and Certain Other Law (Amendment)

Act, 2003, which repeals the Karnataka Contract

Carriages (Acquisition) Act, 1976, is

constitutional.

(b) The State Transport Authority (STA) possesses

the power to delegate its functions under Section

68(5) of the MV Act, as expressly provided by the

statute and further clarified by Rule 56(1)(d) of

the KMV Rules.

29. Consequently, we direct that the appeals of the

respondent corporation (KSRTC) are dismissed, while

the appeals filed by the private bus operators and the

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 45 of 46

Karnataka State Road Transport Authority are

allowed.

30. The impugned orders of the High Court that

denied the delegation power of the STA are set aside,

and it is confirmed that the Secretary of the STA is

empowered to grant non -stage carriage permits

(including contract carriage, special, tourist, and

temporary permits) in accordance with Section 68(5)

of the MV Act and Rule 56(1)(d) of the KMV Rules,

subject to the limitations and conditions prescribed

therein.  

31. The appropriate authorities are directed to take

all necessary measures to implement the above

findings and ensure that the delegation of permit-

granting power is exercised in a manner consistent

with the statutory provisions and the objectives of

efficient public transport administration.

CA@SLP(Civil) No.27833-27834 of 2011 etc. etc.

Page 46 of 46

32. All pending applications are disposed of.

………………………………..J.

[VIKRAM NATH]

………………………………..J.

[PRASANNA B. VARALE]

NEW DELHI;

FEBRUARY 06, 2025