Vijay Kumar Sharma & Ors Vs. State of Karnataka & Ors [1990] INSC 60 (27 February 1990)
1990 Latest Caselaw 60 SC

Vijay Kumar Sharma & Ors Vs. State of Karnataka & Ors [1990] INSC 60 (27 February 1990)

Misra Rangnath Misra Rangnath Sawant, P.B. Ramaswamy, K.

CITATION: 1990 AIR 2072 1990 SCR (1) 614 1990 SCC (2) 562 JT 1990 (2) 448 1990 SCALE (1)342

ACT:

Karnataka Contract Carriages (Acquisition) Act, 1976:

ss. 14, & 20--Whether repugnant to ss. 74 & 80, Motor Vehi- cles Act, 1988--State Act whether impliedly repealed by Parliamentary Act--State Act whether hit by Article 254 of the Constitution.

HEAD NOTE:

Constitution of India, Article 254.' Repugnancy between the Parliamentary Act and the State Act in respect of mat- ters, in the Concurrent List, Seventh Schedule--When arises--Karnataka Contract Carriages (Acquisition) Act, 1976---Whether repugnant to the Motor Vehicles Act, 1988.

Statutory interpretation-Doctrine of pith and substance or dominant purpose--Scope of--Whether applicable to find repugnancy under Article 254 of the Constitution between Parliamentary and State laws in respect of matters in List 111. 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 carriages along with the respective permits and/or certifi- cates 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 appro- priate authority as on the notified date. Sub-section (1) of s. 20 provided for cancellation 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 Trans- port Corporation. Sub-section (2) entitled the Corporation to the grant or renewal of contract carriage permits to the exclusion of all other persons, while sub-section (3) re- strained the authority concerned from ?615 entertaining applications from persons other than the Corpo- ration.

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 ordi- narily 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 of ss. 14 and 20 of the Karnataka Contract Car- riages (Acquisition) Act, 1976, filed writ petitions under Article 32 of 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 provi- sions 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 legis- lation operating in the same area, it should be deemed to have impliedly repealed the provisions of ss. 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 254 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 legisla- tion, 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.

For the respondents it was contended that the Acquisi- tion 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 Constitu- tion, and that the Acquisition Act having been 616 reserved for consideration under Art. 254(2) and having received the 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 Car- riages (Acquisition) Act, 1976 and ss. 74 and 80 of the Motor Vehicles Act, 1988 and whether the doctrine of domi- nant purpose and pith and substance is applicable while examining the repugnancy of the two statutes? Per Misra, J. (Concurring with Sawant, J.)

1. There is no direct inconsistency between the Karnata- ka Contract Carriages (Acquisition) Act, 1976 and the Motor Vehicles Act, 1988. [631G-H]

2.1 In cl. (1) of Art. 254 of the Constitution it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Con- current 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 legisla- tion coming within Entry 35 of the Concurrent List. There- fore, 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 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 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 Under- taking 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 and s. 74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted. Section 80 of the Parliamentary Act does contain 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 provision. [630G; 631C] 617 There does not thus appear to be any repugnancy between the two Acts for invoking Art. 254 of the Constitution.

[631D-E] Bar Council of Uttar Pradesh v. State of U.P. & Anr., [1973] 2 SCR 1073; Kerala State Electricity Board v. Indian Aluminium Company, [1976] 1 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 Pharmaceuti- cals 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 Karnataka & Anr. v. Ranganatha Reddy & Anr. [1978] 1 SCR 641, referred to.

Per Sawant, J:

1. There is no repugnancy in the provisions of ss. 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 of the Constitution do not come into play. [652F; 636C]

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 determining 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 different subject matters. If the subject matters covered by -'.he 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] 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 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. Ranga- natha Reddy & Anr. etc., [1978] 1 SCR 641, referred to.

618 Ratan Lal Adukia v. Union of India, [1989] 3 SCR 537, distinguished.

2.2 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, the same could have been achieved by the Transport Undertakings of the State following the spe- cial 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 brought into force. The very fact that instead the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legislature in enacting it was materially different 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 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 service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself. There is no difference in the legal consequences of the schemes under the two enactments. Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit. No acquisi- 619 tion of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnata- ka Act. [634G; 635E-G]

3.2 Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the MV Act 1939) that Chapter VI relating to the special provisions about the State Trans- port Undertaking and the rules' 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 such law. Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V. This means that when under Chapter VI, a scheme is prepared by the State Govt. entrusting the contract carriage services in relation to any area or route or por- tion thereof, to a State Transport Undertaking to the exclu- sion---complete 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 considera- tion 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 valid- ity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter. If it is open to resolve the conflict between two entries in differ- ent Lists, viz., the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legislations, there is no reason why the repugnancy under Article 254 of the Constitution between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same 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] 620 Meghraj & Ors. v. Allahrakhiya & Ors., AIR 1942 FC 27 distinguished.

Per K. Ramaswamy, J. (Dissenting)

1. Section 14(1) of Karnataka Contract Carriages (Acqui- sition) Act, 1976 to the extent of prohibiting to make fresh application for grant of permits to run the contract car- riages 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 matter in the Concurrent List III subject to Art. 254 of the Constitution.

The entries in the three lists merely demarcate the legisla- tive field or legislative heads. Their function is not to confer powers on either the Parliament or the State Legisla- ture. [682E-D] Subrahmanyam Chettiar v. Muttuswami Goundan., AIR 1941 FC 47; Governor General in Council v. The Reliegh Investment Co. Ltd., [1944] FCR 229; Harakchand Ratanchand Banthia v. Union of India, [1970] 1 SCR 479 AND Union of India v.H.S. Dhillon, [1972] 2 SCR 33, referred to.

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 engrafted 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 President's assent. [659D-F] 621

2.3 The question of repugnancy under Article 254 of the Constitution 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 List. The substance of the same matter occupying the same 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. Krish- na v. Madras State, [1957] SCR 399; Prem Nath Kaul v. State of J &K, [1952] 2 Supp. SCR 273; Bar Council of U.P.v. State of U.P., [1973] 2 SCR 1073; Deep Chand v. State ofU. P., [1959] Supp. 2 SCR 8; State of Orissa v.M.A. Tulloch & Co., [1964] 4 SCR 461; State of Assam v. Horizon Union, [1967] 1 SCR 484; State ofJ & K v.M.S. Farooqi, [1972] 3 SCR 881; Kerala State Electricity Board v. Indian Aluminium Co., [1976] I SCR 552; Basu's Commentary on the Constitution of India (Silver Jubilee Edition) Volume K 144; Clyde Engineer- ing Co. v. Cowburn, [1926] 37 CLR 466; Hume v. Palmer, [1926] 38 CLR 441; 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 1 and Blackley v. Devon- dale Cream (Vic.) Pvt. Ltd., [1968] 117 CLR 253, referred to.

2.4 Section 14 read with s. 20 of the 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 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 622 rejected if the permit applied for relate to an approved or notified 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 and the relevant rules cover the entire field of making an applica- tion in the prescribed manner and directs the Regional Transport Authority to 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 21 of 1976 is sufficient to produce conflicting results in their opera- tion in the same occupied filed. The two sets of provisions run on collision course, though an applicant may waive to make an application for a permit. Thereby there exists the operational incompatibility and irreconcilability of the two sets of provisions. Sections 14(1) and 20(3) of the Acquisi- tion Act are repugnant and inconsistent to ss. 73, 74 and 80 of the Act. By operation of proviso to Art. 254(2) of the Constitution, the embargo created by ss. 14(1) and 20(3) of the Acquisition Act to make or invite 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 prin- ciples makes law or amends the existing law. The State Legislature still may 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 exhausted 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 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 Author- ity. [685E; 686B]

3.2 The Karnataka State Legislature is, therefore, at liberty to make afresh the law similar to ss. 14(1) and 20(3) of the Acquisition Act with 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 opera:ion. The principle would be equally applicable to a question under 623 Article 254(2) of the Constitution.

In the instant case, s. 217(1) of the 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] Zaveribhai v. State of Bombay, [1955] 1 SCR 799; M. Karunanidhi v. Union of India, [1979] 3 SCR 254; T. Barai v. Henry Ah Hoe, [1983] 1 SCR 905 and M/s Hoechst Pharmaceuti- cals 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 not applicable. [683F] 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 predomi- nant 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 fails in one List it must be deemed not to fail in another List, despite inciden- tal encroachment and its validity should be determined accordingly. The pith and substance rule, thereby, resolves the problem of overlapping of "any two entries of two dif- ferent Lists vis-a-vis the Act" on the basis of an inquiry into the "true nature and character" of the legislation as a whole and tries to find whether the impugned law is substan- tially within the competence of the Legislature which enact- ed it, even if it incidentally trespasses into the legisla- tive field of another Legislature. [680C; 677F; 678A1

6.2 The doctrine has no application when the matter in question is covered by an entry or entries in the Concurrent List and has occupied the same field both in the Union and the State Law. It matters little as in which entry or en- tries 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 Concurrent List. The question of incidental or ancillary encroachment or to trench into forbidden field does not arise. The determination of its 'true nature and character also is immaterial. [680C-D] 624 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 1989 etc.

(Under Article 32 of the Constitution of India).

G. Ramaswamy, Additional Solicitor General (N.P.), F.S. Nariman, 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 par- ties.

The following Judgments of the Court were delivered:

RANGANATH MISRA, J. I have the benefit of reading the 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 enforce- ment of the Motor Vehicles Act, 1988, while Brother K. Ramaswamy has come to the contrary conclusion. Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments I have found additional reasons to support the conclusion of Sawant. J., I proceed to indicate the same in my separate judgment.

These applications under Article 32 of the Constitution by a group of disgruntled applicants for contract carriage permits call in question action of the concerned transport authorities in not entertaining their applications under the provisions of the Motor Vehicles Act, 1988.

Motor Vehicles Act (4 of 1939) made provision for grant of contract carriage permits. The Karnataka Contract Car- riages (Acquisition) Act (Karnataka Act 21 of 1976) received assent of the President on 11th of March. 1976. but was declared to have come into force from 30th of January, 1976, when the corresponding Karnataka Ordinance 7 of 1976 had come into force. The long title of the Act indicated that it was an Act to provide for the acquisition of contract car- riages and for matters incidental. ancillary or subservient thereto, and the preamble stated:

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 common detriment;

And whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidental, ancillary or subservient thereto ...... " Section 2 contains the declaration to the following effect:

"It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Con- stitution of India and the acquisition therefore of the contract carriages and other property referred to in section 4." Under ss 4 contract carriages owned or operated by contract carriage operators along with the respective per- mits and/or certificates of registration, as the case may be, vested in the State absolutely free from encumbrances, and compensation for such acquisition was provided under the scheme of the Act. Section 14 prohibited application for any permit or fresh permit or renewal of existing permits for running of any contract carriage in the State by any private operator and all pending proceedings in relation to grant or renewal abated. Consequential provisions were made in ss. 15 and 16 of the Act. Section 20 gave the Corporation the exclusive privilege of running contract carriages within the State to the exclusion of any provision under the 1939 Act.

The vires of the Act was the subject-matter of the decision of this 626 Court in a group of appeals in the case of the State of Karnataka & Anr. v. Shri Ranganatha Reddy & Anr., [1978] 1 SCR 641. A Seven Judge Bench upheld the validity of the statute holding that the impugned statute was an 'acquisi- tion Act' within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution. The Court took note of the fact that even though it may have had some incidental impact on inter-State trade or commerce it did not suffer from any lacuna on that count. Since the Act had been reserved for Presidential assent, to the extent s. 20 made provisions contrary to those in the Motor Vehicles Act of 1939, was taken to be valid under Art. 254(2) of the Constitution.

The Motor Vehicles Act (59 of 1988) being a Parliamen- tary 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 con- tract carriages. Sections 73, 74 and 80 contain the relevant provisions in this regard. While s. 73 provides for an application for such permit, s. 74 contains the procedure for the consideration of the grant and s. 80 contains a general provision that the transport authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under the Act. It is the contention of the petitioners that with the enforcement of the Motor Vehicles Act of 1988 as a piece of central legislation, the provisions of s. 20 of the Karnataka Act became void to the extent the state law was inconsistent with the provisions of the 1988 Act and, therefore, by operation of the provisions contained in Art. 254 of the Constitution, s. 20 stood abrogated and the scheme of the 1988 Act became operative.

The applications of the petitioners for grant of contract carriage permits were maintainable and should have been entertained and disposed of in accordance with the provi- sions 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 contin- ues to hold the field and the transport authorities had rightly refused to entertain the petitioners' applications.

627 The question for consideration is: Whether Art. 254( 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 Vehi- cles 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 warrant- ed. It is the common case of the parties that with the introduction of federalism and distribution of legislative powers and accepting a Concurrent List wherein in regard to specified subjects the Federal and the Federating State Legislatures had power to legislate, a provision of ration- alisation became necessary. Section 107 of the Government of India Act, 1935, contained the provision to deal with such a situation. The Constituent Assembly accepted a similar mechanism and added a proviso to clause (2) of Art. 254 to meet the difficulties experienced in the intervening years.

The Article reads thus:

"254(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the 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 law made by the Legislature of the State shall, to the extent of the repug- nancy, be void.

(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concur- rent 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 Legis- lature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:

Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State." 628 Though for some time there was difference of judicial opinion as to in what situation Art. 254 applies, decisions of this Court by overruling the contrary opinion have now concluded the position that the question of repugnancy can arise only with reference to a legislation falling under the Concurrent List: Bar Council of Uttar Pradesh v. State of U.P. & Anr., [1973] 2 SCR 1073 and Kerala State Electricity Board v. Indian Aluminium Company, [1976] 1 SCR 552.

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 Pharmaceuticals Ltd. & Anr. v. State of Bihar & Ors., [1983] 3 SCR 130 has laid down that cl. (1) of Art. 254 lays down the general rule and cl. (2) is an 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 State Act had over- riding 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 Act. There can be no controversy that if there is repugnancy, the Parliamen- tary 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 in the Concurrent List. The seven- Judge Bench examining the vires of the Karnataka Act did hold that the State Act was an Act for acquisition and came within Entry 42 of the Concurrent List. That position is not disputed before us. There is unanimity at the Bar that the Motor Vehicles Act is a legislation coming within Entry 35 of the Concurrent List. Therefore, the Acquisition Act and the 1988 Act as such do not relate to one common head of legislation enumerated in the Concurrent List and the State Act and the Parliamentary statute deal with different mat- ters of legislation.

The language of cl. (2) is also similar though applica- ble in a different situation. Apparently in one sense both the clauses operate on a similar level though in dissimilar context. In cl. (2) what is rele- 629 vant is the words: 'with respect to that matter'. A Consti- tution Bench of this court in Zaverbhai Amaidas v. State of Bombay, [1955] 1 SCR 799 emphasised that aspect. Venkatarama Ayyar, J. pointed out:

"The important thing to consider with reference to this provision is whether the legislation is 'in respect of the same matter'. If the later legislation deals not with the matters which formed the subject of the earlier legisla- tion but with other and distinct matters though of a cognate and allied character, then Art. 254(2) will have no applica- tion." A lot of light relevant to the aspect under considera- tion is available from another decision of a Constitution Bench of this Court: (M. Karunanidhi v. Union of India, [1979] 3 SCR 254) Atp. 263 of the Reports, it has been said:

"It would be seen that so far as clause (1) of Article 54 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 Parlia- ment and the State Legislatures. First, regarding the mat- ters contained in List I, i.e., the Union List to the Sev- enth Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned. both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain condi- tions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances:

630

1. Where the provisions of a Central Act and a State Act in the Concurrent List are full.v inconsistent (Emphasis added) and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.

2. Where, however, a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) or Article 254.

3. Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law fails within the four corners of the State List and en- trenchment, if any, is purely incidental or inconsequential.

4. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the provision to Article 254." In Deep Chand v. State of Uttar Pradesh, supra, this court had pointed out that repugnancy between two statutes would arise if there was direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupied the same field.

It has already been stated that the State Act intended to eli- 631 minate private operators from the State in regard to con- tract carriages acquired under the existing permits, vehi- cles and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in s. 20 for excluding the private operators. The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act. Nor does it in s. 73 or s. 74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted.

Section 80 of the 1988 Act does contain a liberalised provi- sion in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in s. 20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision.

Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the filed. Since ss. 73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking Art. 254 of the Constitution. A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act.

A number of precedents have been cited at the hearing and those have been examined and even some which were not referred to at the bar. There is no clear authority in support of the stand of the petitioners--where the State law is under one head of legislation in the Concurrent List; the subsequent Parliamentary legislation is under another head of legislation in the same List and in the working of the two it is said to give rise to a question of repugnancy.

The State Act had done away with the private operators qua contract carriages within the State. It is true that the 1988 Act is applicable to the whole of India and, therefore, is also applicable to the State of Karnataka in the absence of exclusion of the State of Karnataka from its operation.

But as has been pointed out already, there is no direct inconsistency between the two and on the facts placed in the case there is no necessary invitation to the application of cl. (1) of Art. 254 of the Constitution.

632 The writ petitions fail and are dismissed.

SAWANT, J. This group of petitions raises a common question of law viz. whether the Motor Vehicles Act, 1988 (hereinafter referred to as the MV Act 1988) has impliedly repealed the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the Karnataka Act).

2. The petitioners claim a declaration that the provisions of Sec. 14 and 20 of the Karnataka Act are invalid because of their repugnancy with the provisions of the MV Act, 1988, and a direction to respondent nos. 2 and 3, namely the Karnataka State Transport Authority and the Karnataka Re- gional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sec. 74 and 80 of the MV Act, 1988, without reference to the provisions of the Karnataka Act. The precise question that falls for consideration, therefore, is whether there is a repugnancy between the two legislations.

3. The Karnataka Act, as its title shows, was enacted to provide for the acquisition of contract carriages and for matters incidental, ancillary and subservient thereto. It was enacted under Entry 42 of the Concurrent List read with Article 31 of the Constitution, in furtherance of Article 39(b) and (c) thereof. This is evident from the preamble, and Section 2 of the Act. The preamble states that since the contract carriages and certain other categories of public service vehicles were being operated in the State in a manner highly detrimental and prejudicial to public inter- est, it was necessary to prevent the misuse, and to provide better facility for the transport of the passengers by road.

It was also necessary to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community were so distributed as best to subserve the common good and that the operation of the economic system did not result in the concentration of wealth and means of production to the common detriment. To effectuate the said intention it was considered necessary to enact the legislation. Section 2 of the Act makes a declara- tion in the following words:

"It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in Clauses (b) and (c) of Article 39 of the Con- stitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4." 633 Under Section 4 of the Act every contract carriage owned or operated by contract carriage operator along with the permit or the certificate of registration or both as the case may be, vested in the State Government absolutely and free from all encumbrances. Further, a11 rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, in- struments, machinery, tools, plants, apparatus and other equipments used for the maintenance, repair of, or otherwise in connection with the service of the contract carriage as the State Government may specify in that behalf and all books of accounts, registers, records and all other docu- ments of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose. Section 6 provided for payment of compensation for the acquisition of all the said property.

Since the avowed object of the Act was two fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy under- lying Clauses (b) and (c) of Article 39 of the Constitution, it was also necessary to prevent the issue of fresh permits or renewal of the existing permits for running the contract carriages in the State to any private individual. Hence, Section 14 provided for a prohibition of the issue of fresh permit or renewal of the existing permit to any individual or the transfer of such permit to anyone except to the State Government or the Corporation which it may establish under the Karnataka State Road Transport Corporation Act, 1950. To make an alternative arrangement for running the contract carriages and to prevent both the misuse of the permits as well as concentration of wealth in the hands of a few indi- viduals, Section 20 of the Act provided that all contract carriage-permits granted or renewed till then would stand cancelled and the Corporation alone would be entitled to the grant or renewal of the said permits to the exclusion of all other persons, and that applications from persons other than the Corporation for the grant of such permit shall not be entertained.

In State of Karntaka & Anr. etc. v. Shri Ranganatha Reddy & Anr. etc., [1978] 1 SCR 641 this Court upheld the validity of the said Act holding, among other things, that the Act was for acquisition of property and was in the public interest and for a public purpose. The Act, according to the Court, had nationalised the contract transport serv- ice in the State and that was also for a public purpose as declared in the Act. It was also observed that if Articles 38 and 39 are to be given 634 effect to, then the State has progressively to assume the predominant and direct responsibility for setting up new industrial undertakings which would also include development of transport facilities. The State has also to become agency for planned national development, and the socialistic pat- tern of society as the national objective required that public utility services should be in the public sector. The acquisition of road transport undertaking by the State, therefore, undoubtedly served the public purpose.

4. It is thus clear from the provisions of the Karnataka Act that the whole object of the Act is to nationalise the contract carriage service in the State with a view to put an end to the abuse of the contract carriage services by the private operators and to provide better transport facilities to the public, and also to prevent concentration of the wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all. To secure the objective of the Act, it was also necessary to prohibit the grant of the contract carriage permits to private indi- viduals and to reserve them exclusively to the State Under- taking which was done by Sections 14 and 20 of the Act.

Unlike the MV Act 1988, which is admittedly enacted by the Parliament under Entry 35 of the Concurrent List, to regu- late the operation of the motor vehicles, the object of the Karnataka Act is not only the regulation of the operation of the motor vehicles. Nor is its object merely to prevent the private owners from operating their vehicles with the exclu- sive privilege of such operation being reserved in favour of the State or the State Undertaking. For if that were the only object, the same could have been achieved by the Trans- port Undertakings of the State following the special provi- sions relating to State Transport Undertakings in Chapter IV-A of the Motor Vehicles Act, 1939 which was in operation when the Karnataka Act was brought into force. The very fact that instead, the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legis- lature in enacting it was materially different. This is also obvious from the various provisions of the enactment pointed out above.

5. It is for this reason that the contention advanced by the petitioners that the object of the Karnataka Act and that of the MV Act, 1988 is the same and that both of them occupy the same field, cannot be accepted. A comparison of the provisions of the MV Act, 1939 (Old Act) and MV Act, 1988 (New Act) further shows that the latter has merely replaced the former. All that it has done is to update, simplify and rationalize the law on the subject. For this purpose it has made important provisions in the following matters, namely:

635 "(a) rationalisation of certain definitions with additions of certain new definitions of new types of vehicles;

(b) Stricter procedures relating to grant of driving li- cences and the period of validity thereof;

(c) laying down of standards for the components and parts of motor vehicles;

(d) standards for anti-pollution control devices;

(e) provision for issuing fitness certificates or vehicles also by the authorised testing stations;

(f) enabling provision for updating the system of registra- tion marks;

(g) liberalised schemes for grant of stage carriage permits on non-nationalised routes, all India Tourist permits and also national permits for goods carriages;

(h), (i), (j), (k), (l) ..........

6. The special provisions relating to the State Trans- port Undertakings which are contained in Chapter VI of the new Act are pari materia with those of Chapter IV-A of the old Act, with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself. There is no difference in the legal consequences of the schemes under the two enactments. Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit. No acquisition of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnataka Act.

It is also not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field. We see no such provision in the Act nor was any pointed out to us. The provisions with regard to the grant of 636 permits under both the old and the new Act are the same. In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act.

7. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karna- taka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof. The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the Concurrent list to regulate the operation of the motor vehicles. The objects and the subject matters of the two enactments are materially different. Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations.

8. Shri Nariman, the learned counsel for the petitioners however, contended that the provisions of Section 14 and 20 of the Karnataka Act were in direct conflict with the provi- sions of Sections 74 and 80(2) of the MV Act 1988. According to him while the Regional Transport Authority (RTA) is enjoined by the provisions of Section 74 read with Section 80(2) of the MV Act 1988, ordinarily not to refuse to grant an application for permit of any kind, the provisions of Section 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from enter- taining or granting, application for running any contract carriage in the State. Thus there is a direct conflict between the two legislations, and since the MV Act 1988 is a later legislation, operating in the same area, it should be deemed to have impliedly repealed the provisions of Section 14 and 20 of the Karnataka Act, even if the latter Act had received the assent of the President. This is so because of the proviso to sub-clause (2) of Article 254 of the Consti- tution.

This contention proceeds on the footing that the two legislations occupy the same field. As has been pointed out earlier, the objects of the two legislations are materially different. The provisions of Sections 51 and 57 of the old Act further correspond to provisions of Sections 74 and 80 of the new Act. The Karnataka Act had received the assent of the President inspite of the provisions of Sections 51 and 57 of the old Act. The assent of the President, further as stated by the respondents, was taken by way of abundant precaution, although the subject matters of the two Acts were different. The provisions of Sections 14 and 637 20 of the Karnataka Act were incidental and necessary to carry out the main object of the said Act. Without the said provisions, the object of the said Act would have been frustrated. In the case of State of Karnataka & Anr. Etc. v..Ranganatha Reddy & Anr. Etc., (supra) while repelling the contention that there was a legislation encroachment by the Karnataka Act because it impinged on the subject of Inter- State Trade & Commerce in the Union List as it provided also for acquisition of transport carriages running on inter- state routes, this Court in para 32 of the Judgment has observed as follows:

" ..... It (the Karnataka Act) is not an Act which deals with any Inter-State Trade and Commerce. Even assuming for the sake of argument that carriage of passengers from one state to the other is in one sense a part of the InterState Trade and Commerce, the impugned Act is not one which seeks to legislate in regard to the said topic. Primarily and almost wholly it is an Act to provide for the acquisition of contract carriages, the Intra-State permits and the other properties situated in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental en- croachment on the topic of inter-state trade and commerce, even assuming there is some, cannot invalidate the Act. The MV Act 1939 was enacted under Entry 20 of List III of Sched- ule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution. The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any between the Act and the Motor Vehi- cles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List 111 deals with acquisition of property. The State has enacted the Act mainly under this entry ...... " (emphasis supplied) According to me these observations should put an end to any controversy on the subject, namely, whether the two Legislations are enacted under two different entries in the Concurrent List, and whether they occupy different areas or not.

I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988. Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the 638 MV Act 1939) that Chapter VI relating to the special provi- sions about the State Transport Undertaking and the rules and orders made thereunder, shall have effect notwithstand- ing 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 such law. Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V. This means that when under Chapter VI, a scheme is prepared by the State Govt.

entrusting the contract carriage services in relation to any area or route or portion thereof, to a State Transport Undertaking to the exclusion--complete or partial of other persons, the provisions of Sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under Section 80 nor can such permits be granted by the Transport Authority. In other words, the MV Act 1988 also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised. Hence it is not correct to say that there is a conflict between the provisions of the two Acts.

9. It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitu- tion, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legis- lation are in conflict with some of the provisions of the Central legislation, the conflicting provisions of the State legislation will be invalid. In support of this contention, reliance was placed on two decisions one of the Federal Court in the case of Meghraj & Ors. v. Allahrakhiya & Ors., 29 AIR 1942 FC 27 and the other of the Privy Council report- ed in AIR 34 1947 PC 722 confirming the former.

The Federal Court in the above decision has observed that when a provincial Act is objected to as contravening not Section 100 but Section 107(1) the Govt. of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise. In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code. The Court held that there was no repugnancy between the legislations. But while holding so, the Court made a one sentence observation as follows: "In the judgment of the High Court there is some discussion of the question of the "pith and substance" of the Act; but that question does not 639 arise as objection is taken not under Section 100 of the Constitution act but Sec. 107." There is no discussion on the point. The arguments, if any advanced on the question are neither reproduced nor dealt with. The observation further was not necessary for the decision in that case, since as is pointed out above, the Court