http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 53  

PETITIONER: VIJAY KUMAR SHARMA & ORS. ETC.

       Vs.

RESPONDENT: STATE OF KARNATAKA & ORS. ETC.

DATE OF JUDGMENT27/02/1990

BENCH: MISRA RANGNATH BENCH: 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 1976: ss. 14, & 20--Whether repugnant to ss. 74 & 80, Motor  Vehi- cles  Act,  1988--State Act whether  impliedly  repealed  by Parliamentary  Act--State Act whether hit by Article 254  of the Constitution.

HEADNOTE:     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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 53  

?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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 53  

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-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 53  

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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 53  

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.

JUDGMENT: 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 53  

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-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 53  

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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 53  

   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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 53  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 53  

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 had held that there was  no repugnancy between the two statutes since they  cov- ered  two different subject matters. Hence the issue  as  to whether  the impugned Punjab Restitution of  Mortgage  Lands Act  was  valid because the pith and substance  of  the  Act covered  an area different from the one covered by the  Con- tract  Act  and the Civil Procedure Code, did not  fall  for consideration  before  the  Court. What is  more,  when  the matter  went  in appeal before the Privy Council,  the  said point was not even remotely referred to and I find no obser- vation in the judgment either confirming, or dissenting from the said observations. This being the case the said observa- tions  cannot  be regarded as more than general  in  nature. They  are  not even an obiter-dicta much less are  they  the ratio  decidendi of the case Hence the said observations  do not have a binding effect.     Even  otherwise, I am of the view that not to apply  the theory of pith and substance when the repugnancy between the two  statutes is to be considered under Article 254  of  the Constitution,  would be illogical when the same doctrine  is applied  while considering whether there is an  encroachment by  the Union or the State legislature or a  subject  exclu- sively  reserved  for the other. When  the  legislative  en- croachment  is under consideration the doctrine of pith  and substance  comes to the aid to validate a legislation  which would otherwise be invalid for the very want of  legislative competence. When the repugnancy between the two legislations is  under  consideration, what is in issue  is  whether  the provision of the State enactment though otherwise  constitu- tionally valid, has lost its validity 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 different Lists,  viz.  the Union  and the State List by examining the dominant  purpose and  therefore  the pith and substance of the  two  legisla- tions,  there  is no reason why the repugnancy  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 legis- lations are on the same subject matter or not. In both cases the  cause of conflict is the apparent identity of the  sub- ject matter. The tests for resolving it therefore cannot  be different. 640     10.  I may in this Connection refer to some of  the  au- thorities  relied upon by the parties. In Municipal  Council Palai  v.T.J. Joseph & Ors., [1964] 2 SCR 87 this Court  had to consider the repugnancy between the presolution passed by the  appellant Municipal Council in exercise of  the  powers vested  in  it under Section 286 and 287 of  the  Travancore District  Municipalities  Act 1941, and  the  provisions  of Section 42 of the Travancore-Cochin Motor Vehicles Act  1950 which came into force on January 5, 1950, providing for  the use  of  a public bus stand constructed for  Stage  Carriage buses starting from and returning to the Municipal limits or passing through its limits.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 53  

   The  respondent operators challenged the  resolution  of the  Council by contending that the provisions  of  Sections 286  and  287 of the Municipalities Act  stood  repealed  by implication  by  virtue of the provisions of Section  42  of Travancore-Cochin  Motor  Vehicles Act, 1950.  That  Section read as follows: "Government  or any authority authorised in this  behalf  by Government  may,  in consultation with the  local  authority having jurisdiction in the area concerned, determine  places at which motor vehicles may stand either indefinitely or for a specified period of time, and may determine the places  at which  public  service vehicles may stop for a  longer  time than  is  necessary for the taking up and  setting  down  of passengers. ’ ’ The  High Court accepted the contention of  the  respondents and  allowed the Writ Petition. In appeal against  the  said decision,  this  Court  discussed the law  relating  to  the repugnancy between two legislations by referring to  various decided  cases foreign as well as Indian. The Court  pointed out  that in Daw v. The Metropolitan Board of Works,  [1862] 142  ER  1104 after stating the general principles  of  con- struction,  the Court there had said that when the  legisla- tion  was found dealing with the same subject matter in  two Acts,  so  far as the later statute derogates  from  and  is inconsistent  with the earlier one, the legislature must  be held to have intended to deal in the later statute with  the same subject matter which was within the ambit of the earli- er  one. This Court further observed that in that  case  the English Court was concerned with the statutes which  covered more or less the same subject matter and had the same object to  serve. That decision further had kept open the  question whether the powers conferred upon one authority by an earli- er  Act,  could continue to be exercised by  that  authority after the enactment of a provision in a subsequent law which 641 conferred  wide  powers  on another  authority  which  would include some of the powers conferred by the earlier  statute till  the  new authority chose to exercise the  powers  con- ferred  upon it. Referring to the case of The Great  Central Gas  Consumers  Co. v. Clarke, [1863] 143 ER 331  the  Court observed  that the foundation of that decision was that  the later statute was a general one whereas the previous one was a  special  one and, therefore, the special statute  had  to give way to the later general statute.     Referring  to the case of Goodwin v. Phillips, [1908]  7 CLR  16  the  Court observed that the  doctrine  of  implied repeal  was well recognised, and that repeal by  implication was a convenient form of legislation and that by using  this device,  the  legislature  must be  presumed  to  intend  to achieve a consistent body of law. The Court then went on  to say  that  it is undoubtedly true that the  legislature  can exercise  the powers of repeal by implication, but it is  an equally  well-settled principle of law that there is a  pre- sumption against an implied repeal. Upon the assumption that the legislature enacts laws with a complete knowledge of all existing laws pertaining to the same subject, the failure to acid a repealing clause indicates that the intent was not to repeal existing legislation. This presumption is rebutted if the  provisions of the new Act are so inconsistent with  the old ones that the two cannot stand together. Then the  Court referred  to the following observations from page 631,  para 311 of Crawford on Statutory Construction: "There must be what is often called ’such a positive  repug- nancy  between  the two provisions of the old  and  the  new statutes  that they cannot be reconciled and made  to  stand

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 53  

together’. In other words they must be absolutely  repugnant or  irreconcilable.  Otherwise,  there  can  be  no  implied repeal   .....  for the intent of the legislature to  repeal the old enactment is utterly lacking." The  Court then referred to the observations made in  Crosby v.  Patch, 18 Calif. 438 quoted by Crawford "Statutory  Con- struction" p. 633 to point out the reasons of the rule  that an  implied  repeal will take place in the  event  of  clear inconsistency  or repugnancy. The said observations  are  as follows: "As  laws are presumed to be passed with  deliberation,  and with  full knowledge of all existing ones on the  same  sub- ject, it is but reasonable to conclude that the Legislature, in 642 passing  a  statute,  did not intend to  interfere  with  or abrogate any former law relating to the same matter,  unless the  repugnancy between the two is irreconcilable. Bowen  v. Lease,  5  Hill  226. It is a rule, says  Sedgwick,  that  a general  statute without negative words will not repeal  the particular  provisions of a former one, unless the two  acts are irreconcilably inconsistent. ’The reason and  philosophy of  the rule’, says the author, ’is, that when the  mind  of the legislator has been turned to the details of a  subject, and  he has acted upon it, a subsequent statute  in  general terms,  or teating the subject in a general manner, and  not expressly  contradicting the orginal act, shall not be  con- sidered  as intended to affect the more particular or  posi- tive previous provisions, unless it is absolutely  necessary to  give the latter act such a construction, in  order  that its words shall have any meaning at all." The  Court then pointed out that for implying a  repeal  the next  thing  to be considered is whether  the  two  statutes relate to the same subject matter and have the same purpose. The Court in this connection quoted the following passage at page 634 from Crawford: "And, as we have already suggested, it is essential that the new  statute  covers the entire subject matter of  the  old; otherwise there is no indication of the intent of the legis- lature  to  abrogate the old law.  Consequently,  the  later enactment  will  be construed as a continuation of  the  old one." (emphasis supplied) These  observations  are very material for  considering  the question  with which we are concerned in the  present  case, namely  whether  the doctrine of pith and substance  is  ap- plicable while examining the repugnancy of the two statutes.     The  Court  then stated that the third  question  to  be considered  was whether the new statute purports to  replace the old one in its entirety or only partially, and the Court observed  that  where replacement of an earlier  statute  is partial,  a question like the one, which the Court  did  not choose  to  answer  in Daw’s case (supra)  would  arise  for decision. The Court also stated that it has to be remembered that  at the basis of the doctrine of implied repeal is  the presumption  that  the legislature which must be  deemed  to know the existing law did not intend to create any confusion in the law by retaining conflicting provi- 643 sions  on  the statute book and, therefore, when  the  court applies  this doctrine, it does no more than give effect  to the  intention of the legislature ascertained by it  in  the usual  way, i.e., by examining the scope and the  object  of the two enactments, the earlier and the later.     The Court then referred to its earlier decision in  Deep

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 53  

Chand  v. State of U.P. & Ors., [1959] 2 SCR 8  and  pointed out  that  in that case the following principles  were  laid down to ascertain whether there is repugnancy or not: 1.  Whether there is direct conflict between the two  provi- sions;   2. Whether the legislature intended to lay down an exhaus- tive  code  in respect of the subject matter  replacing  the earlier law; 3. Whether the two laws occupy the same field. The Court then referred to Sutherland on Statutory Construc- tion  (Vol. 13rd Edn. p. 486) on the question of "repeal  of special  and local statutes by general statutes". The  para- graph reads as follows: "The  enactment of a general law broad enough in  its  scope and application to cover the field of operation of a special or  local statute will generally not repeal a statute  which limits  its operation to a particular phase of  the  subject covered  by  the general law, or to  a  particular  locality within  the jurisdictional scope of the general statute.  An implied  repeal  of  prior statutes will  be  restricted  to statutes of the same general nature since the legislature is presumed to have known of the existence of prior special  or particular  legislation,  and to have  contemplated  only  a general  treatment  of  the subject-matter  by  the  general enactment.  Therefore, where the later general statute  does not  propose an irreconcilable conflict, the  prior  special statute will be construed as remaining in effect as a quali- fication of or exception to the general law." The Court, however, hastened to add that there is no rule of law  to  prevent repeal of special and local  statute  by  a later general statute and therefore, where the provisions of the  special  statute are wholly repugnant  to  the  general statute,  it  would be possible to infer  that  the  special statute was repealed by the general enactment. However,  the Court observed that where it is doubtful whether the special statute 644 was  intended  to be repealed by the  general  statute,  the Court  should try to give effect to both the  enactments  as far  as possible, since the general statute applies  to  a11 persons and localities within its jurisdiction and scope  as distinguished from the special one which in its operation is confined  to  a  particular locality.  Where  the  repealing effect  of  a  statute is doubtful, the  statute  is  to  be strictly  construed to effectuate its  consistent  operation with  previous  legislation  as observed  by  Sutherland  on Statutory  Construction.  The  Court also  approved  of  the observations  of Suleman J., in Shyamakant Lal v.  Rambhajan Singh,  [1939] FCR 193 that repugnancy must exist  in  fact, and not depend merely on a possibility. After discussing the principles  of repugnancy as above, the Court  answered  the question that fell for consideration before it in favour  of the Municipal Council by observing as follows:          "It seems to us however, clear that bearing in mind the  fact  that the provisions of s. 72  of  the  Travancore Cochin  Motor Vehicles Act were intended to apply to a  much wider  area than those of ss. 286 and 287 of the  Travancore District Municipalities Act it cannot be said that s. 72 was intended  to  replace  those provisions  of  the  Travancore Distt. Municipalities Act. The proper way of construing  the two  sets  of  provisions would be to regard s.  72  of  the Travancore-Cochin Motor Vehicles Act as a provision inconti- nuity with ss. 286 and 287 of the Travancore District Munic- ipalities  Act so that it could be availed of by the  appro- priate  authority as and when it chose. In other  words  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 53  

intention of the legislature appears to be to allow the  two sets  of  provisions to co-exist because both  are  enabling ones.  Where such is the position, we cannot  imply  repeal. The  result  of this undoubtedly would be that  a  provision which  is added subsequently, that is, which represents  the latest  will  of  the legislature will  have  an  overriding effect  on the earlier provision in the sense  that  despite the’  fact that some action has been taken by the  Municipal Council by resorting to the earlier provision the  appropri- ate  authority may nevertheless take action under s.  72  of the  Travancore  Cochin Motor Vehicles Act,  the  result  of which would be to override the action taken by the Municipal Council under s. 287 of the District Municipalities Act.  No action under section 72 has so far been taken by the Govern- ment and, therefore, the resolutions of the Municipal  Coun- cil  still hold good. Upon this view it is not necessary  to consider certain other points raised by learned counsel." 645     It  would thus appear from this decision that the  Court held  there  that the allegedly  conflicting  provisions  of Travancore Cochin Motor Vehicles Act were intended to  apply to  much  wider  area than the relevant  provisions  of  the Distt.  Municipalities Act and, therefore, it could  not  be said  that  the provisions of the Motor  Vehicles  Act  were intended  to replace the provisions of  Municipalities  Act. The  Court also held that the proper way of  construing  the two  sets of provisions would be to regard  the  conflicting provisions of the Motor Vehicles Act as provisions in conti- nuity with the relevant provisions of the Municipalities Act so that it could be availed of by the appropriate  authority as  and when it chose. The Court, therefore, read  into  the relevant  provisions,  the intention of the  legislature  to allow  the two sets of provisions to co-exist  because  both were  enabling  ones, and in such  circumstances  no  repeal could be implied. The Court also rested the said decision by relying  on the fact that since no action was taken  by  the Government under the relevant provisions of the Motor  Vehi- cles  Act, till such time as the action was taken under  the said  provisions, the Municipal Council could act under  the provisions of the Municipalities Act.     What  is important from our point of view, is  the  view taken  in that case that when repugnancy is alleged  between the two statutes, it is necessary to examine whether the two laws  occupy  the same field, whether the new or  the  later statute covers the entire subject matter of the old, whether legislature  intended  to  lay down an  exhaustive  code  in respect of the subject matter covered by the earlier law  so as  to  replace it in its entirety and whether  the  earlier special statute can be construed as remaining in effect as a qualification  of  or exception to the  later  general  law, since  the  new statute is enacted knowing  fully  well  the existence of the earlier law and yet it has not repealed  it expressly. The decision further lays down that for examining whether the two statutes cover the same subject matter, what is  necessary to examine is the scope and the object of  the two enactments, and that has to be done by ascertaining  the intention  in the usual way and what is meant by  the  usual way  is nothing more or less than the ascertainment  of  the dominant object of the two legislations.     In Ratan Lal Adukia v. Union of India, [1989] 3 SCR  537 the conflict was between the provisions of Section 80 of the Railways Act 1890 as amended by the Railways (Amendment) Act 1961 on the one hand and the provisions of Section 20 of the Code  of Civil Procedure, 1908 and section 18 of the  Presi- dency Small Causes Courts Act 1882, on the other. Section 80

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 53  

of the Railways Act before its amendment had 646 provided  that a suit for compensation for loss of  life  or injury to a passenger or for loss, destruction and  deterio- ration  of animals or goods, would lie where the  passengers or  the animals or goods were booked through over the  Rail- ways  of  two or more Railway Administrations,  against  the Railway  Administration  from which the passengers  and  the goods  were booked or against the Railway Administration  on whose railway the loss injury, destruction or  deterioration occurred. By the amendment of 1961, the aforesaid provisions of  Section 80 were changed and such a suit was  made  main- tainable--(a) if the passenger or the animals or goods  were booked  from  one station to another on the railway  of  the same  Railway Administration, against that Railway  Adminis- tration. (b) if they were booked through over the railway of two  or  more Railway Administrations, against  the  Railway Administration  from which they were booked or  against  the Railway  Administration  on whose  railway  the  destination station  lay or the loss etc. occurred. It was further  pro- vided  that  in either of these two cases the  suit  may  be instituted in a court having jurisdiction over the place  at which the passenger or the goods were booked or the place of destination  or  over  the place in  which  the  destination station  lies  or the loss etc. occurred. Thus  the  changes brought  about  by the amendment were significant.  The  old section did not deal with the liability of claims in respect of  goods etc. carried by single railway. It only  concerned itself  with  them when they were carried by more  than  one railway  and provided that the suit for loss of  such  goods could  he brought against either the Railway  Administration with  which  the  booking was made or  against  the  Railway Administration  of  the delivery station.  The  old  section further  did not speak of the places where such suits  could be laid. The choice of the forum was regulated by section 20 of  the Code of Civil Procedure or section 18 of the  Presi- dency Small Causes Courts, as the case may be. The amendment of  the section however, made a departure in  this  respect, namely,  it also named the place where such suits  could  be instituted and it is with this change the decision in  ques- tion  was concerned. Confirming the High Court’s  view,  the Court held that the new Section 80 prevailed over the provi- sions  of Section 20 of the Code of Civil Procedure  and  of Section  18 of the Presidency Small Causes Courts  Act.  The Court took the view that in view of the fact that the provi- sions  of the new Section 80 as well as the relevant  provi- sions  of  the Code of Civil Procedure  and  the  Presidency Small Causes Courts Act dealt with the same subject  matter, namely,  the forum for suits, and since the new  Section  80 was  a special provision relating to special  suits  against the  Railway  Administration the  special  provisions  would prevail  over the general provisions. The Court also  stated that Section 80, looking into its earlier history 647 and  the other changes which were brought in it, was a  code in  itself  dealing with the relevant  subject  matter,  and therefore,  it repealed the provisions of Section 20 of  the Code of Civil Procedure and of Section 18 of the  Presidency Small Causes Courts Act by necessary implication. The  Court also held that since the provisions of the latter two gener- al  statutes related to territorial jurisdiction  of  courts and  since the amendment to Section 80 also dealt  with  the same  subject,  but in case of only suits  for  compensation against  the Railway, Section 80 being the  special  statute should  be  deemed to have supplanted the  general  statutes

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 53  

like  the Code of Civil Procedure and general provisions  of section  20 of the Code and Section 18 of the Presidency  of Small Causes Courts Act.     It  will thus be apparent that in that case  the  provi- sions  which  were in conflict related to the  same  subject matter  unlike  in our case. The provisions with  regard  to application and grant of permits in Sections 14 and 20  have nothing in common with the provisions of Sections 74 and  80 of  the Motor Vehicles Act 1988. The former  provisions  are ancillary to giving effect to the acquisition and nationali- sation  of the road transport within local territorial  lim- its.  The  later  provisions are general in  nature  and  in furtherence  of the object of the Act which is  to  regulate transport. The subject matters of both the statutes and  the object of the two sets of provisions are, therefore, materi- ally  different.  In our case both the  statutes  can  stand together.  The legislative intent is clear. Since,  further, the  Parliament had enacted the later statute knowing  fully well the existence of the earlier statute and yet it did not expressly repeal it, it will be presumed that the Parliament felt that there was no need to repeal the said statute.     In  Ch. Tika Ramji & Ors. etc. v. State of U.P. &  Ors., [1956]  SCR 393 what fell for consideration was the  alleged repugnancy between the U.P. Sugarcane (Regulation of  Supply and  Purchase) Act 1953 and two Notifications issued by  the State Government under it on September 27, 1954 and November 9,  1955  on  the one hand, and  Industries  (Development  & Regulation) Act 1951 and the Essential Commodities Act  1955 and the Sugar Cane Control Order 1955 issued under it on the other. The Court has stated there that no question of repug- nancy under Article 254 of the Constitution can arise  where Parliamentary  legislation  and  State  legislation   occupy different fields and deal with separate and distinct matters even  though of a cognate and allied nature, and whereas  in that case there was no inconsistency in the actual terms  of the Act enacted by Parliament and the State Legislature, the test of repugnancy would be whether Parliamentary 648 and  the State Legislature in legislating under an Entry  in the  Concurrent  List exercised their powers over  the  same subject  matter  or whether the laws enacted  by  Parliament were  intended  to be exhaustive so as to cover  the  entire field.     The Court then referred to three tests of  inconsistency or  repugnancy listed by Nicholas on p. 303 2nd Edn. of  his Australian Constitution, namely, (1) there may be inconsist- ency  in  the actual terms of the  competing  statutes,  (2) though  there may be no direct conflict, a State law may  be inoperative  because the Common Wealth Law, or the Award  of Common Wealth Court is intended to be a complete  exhaustive code, (3) even in the absence of intention, the conflict may arise when both State and Common Wealth Law seek to exercise their  powers over the same subject matter. The  Court  also quoted  with  approval, observations of  the  Calcutta  High Court  in G.P. Stewart v.B.K. Roy Choudhary, AIR  1939  Cal. 628 on the subject which are as follows:          "It is sometimes said that two laws cannot be  said to  be properly repugnant unless there is a direct  conflict between  them, as when one says "do" and the other  "don’t", there is no true repugnancy according to this view, if it is possible  to obey both the laws. For reasons which we  shall set  forth  presently, we think that this is  too  narrow  a test: there may well be cases of repugnancy where both  laws say "don’t" but in different ways. For example, one law  may say,  "No  person shall sell liquor by retail, that  is,  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 53  

quantities of less than five gallons at a time" and  another law  may say, "No person shall sell liquor by  retail,  that is, in quantities of less than ten gallons at a time". Here, it  is obviously possible to obey both laws, by obeying  the more  stringent of the two namely the second one; yet it  is equally obvious that the two laws are repugnant, for to  the extent to which a citizen is compelled to obey one of  them, the other, though not actually disobeyed, is nullified".          "The principle deducible from the English cases, as from  the Canadian cases, seems therefore to be the same  as that enunciated by Issacs, J.in the Australian 44 hours case (37 CLR 466) if the dominant law has expressly or  impliedly evinced  its  intention  to cover the whole  field,  then  a subordinate law in the same field is repugnant and therefore inoperative. Whether and to what extent in a 649 given case, the dominant law evinces such an intention  must necessarily depend on the language of the particular law". The Court also approved the observations of Sulaiman, J.  in Shyamakant  Lal v. Rarnbhajan Singh, (supra) on the  subject which are as follows:          "When the question is whether a Provincial legisla- tion  is  repugnant to an existing Indian law, the  onus  of showing its repugnancy and the extent to which it is  repug- nant  should be on the party attacking its  validity.  There ought  to  be a presumption in favour of its  validity,  and every  effort should be made to reconcile them and  construe both so as to avoid their being repugnant to each other; and care  should be taken to see whether the two do  not  really operate  in different fields without encroachment.  Further, repugnancy  must exist in fact, and not depend merely  on  a possibility.  Their  Lordships  can  discover  no   adequate grounds for holding that there exists repugnancy between the two  laws in districts of the Province of Ontario where  the prohibitions of the Canadian Act are not and may never be in force: (Attorney-General for Ontario v. Attorney-General for the Dominion, [1896] AC 348).     11. Referring to the case in hand; the Court then stated that  there  was  no question of any  inconsistency  in  the actual terms of the two Acts. The only questions that  arose there were whether the Parliament and the State  Legislature sought to exercise their powers over the same subject matter or  whether the laws enacted by Parliament were intended  to be a complete exhaustive code, or in other words,  expressly or impliedly evinced an intention to cover the whole  field. The Court then compared the provisions of Industries (Devel- opment  and Regulation) Act, 1951 as amended by Act XXVI  of 1953, the Essential Commodities Act X of 1955 and the  Sugar Control  order 1955 issued thereunder with the U.P. Act  and Order of 1954 issued by the State Government thereunder.  By comparing  the  impugned State Act with the Central  Act  of 1951  as amended by the Act, 1953, the Court held  that  the Central Act related to sugar as a finished product while the State legislation covered the field of sugar cane. Thus  the fields  of operation of the two legislations were  different and  hence there was no repugnancy between the  Central  Act and  the  State Act. It was also further pointed  out  there that even assuming that sugar cane 650 was  an article or class of articles relatable to the  sugar industry within the meaning of Section 18(g) of the  Central Act, no order was issued by the Central Government in  exer- cise  of  the powers vested in it under  that  Section,  and hence  no  question of repugnancy could ever  arise  because repugnancy  must  exist in fact and not depend merely  on  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 53  

possibility. The possibility of an Order under Section 18(g) being issued by the Central Government would not be  enough. The  existence of such an Order would be the essential  pre- requisite before any repugnancy could ever arise.     12.  As far as the Essential Commodities Act,  1955  was concerned,  the  Court pointed out that the  Parliament  was well  within  its powers in legislating in regard  to  sugar cane,  and the Central Government was also well  within  its powers in issuing the Sugar Cane Control Order, 1955 because all that was in exercise of the concurrent powers of  legis- lation  under Entry 33 of List 111. That, however,  did  not affect the legislative competence of the U.P. State Legisla- ture  to enact the law in regard to sugar cane and the  only question  which had to be considered was whether  there  was any  repugnancy  between  the provisions  of  the  Essential Commodities  Act and the State legislation in  that  behalf. The Court then pointed out that the State Government did not at  all provide for the fixation of minimum price for  sugar cane. Neither had it provided for the regulation of movement of  sugar  cane  as was done by the  Central  Government  in Clauses  (3) and (4) of the Sugar Cane Control  Order  1955. Likewise, the provision contained in Section 17 of the State Act  in regard to the payment of sugar cane price (as  fixed by the Central Govt.) and the recovery thereof as if it  was an  arrear  of land revenue, did not find its place  in  the Central Government Sugar Cane Control Order 1955. The provi- sions  in  the two legislations  were,  therefore,  mutually exclusive and did not impinge upon each other. By  referring to  the provisions of Central Government Sugar Cane  Control Order  1955  and the U.P. Govt. Sugar Cane  (Regulation  and Purchase)  Order 1954 issued under the respective  statutes, the  Court  pointed out that none of those  provisions  also overlapped. The Centre was silent with regard to some of the provisions which had been enacted by the State and the State was  silent with regard to some of the provisions which  had been enacted by the Centre. There was no repugnancy whatever between those provisions, and neither the State Act nor  the rules  flamed thereunder as well as the  State  Government’s Order  issued under it, trenched upon the field  covered  by the Essential Commodities Act. The Court therefore held that since  there was no repugnancy between the two,  the  provi- sions  of  Article 254(2) of the Constitution did  not  come into play. The Court then considered 651 whether  the repealing Section 16 of the Essential  Commodi- ties  Act and clause 7 of the Sugar Cane Control Order  1955 had repealed the State Act to the extent mentioned  therein. Section 16(1)(b) provides as follows: "16(1) The following laws are hereby repealed-- (a) x               x               x               x (b)  any other law in force in any State immediately  before the commencement of this Act in so far as such law  controls or  authorises  the control of the  production,  supply  and distribution  of, and trade and commerce in,  any  essential commodity". The  contention  was  that the expression  "any  other  law" covered  the  impugned State Act which was in force  in  the State  immediately before the commencement of the  Essential Commodities Act in so far as it controlled or authorised the control of production, supply and distribution of and  trade and commerce in sugar cane (which was), an essential commod- ity  under the Central Act and Clause (7) of the Sugar  Cane Control Order. The contention advanced on behalf of the U.P. State  was  that under the proviso to  Article  254(2),  the power  to repeal a law passed by the State  Legislature  was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 28 of 53  

incidental to enacting a law relating to the same matter  as is  dealt with in the State legislation and that  a  statute which  merely repeals a law passed by the State  Legislature without enacting substantive provisions on the subject would not  be  within the proviso, as it could not have  been  the intention  of  the Constitution that on a topic  within  the concurrent  sphere  of the legislation, there  should  be  a vaccum. The Court observed that there was considerable force in the said contention and there was much to be said for the view  that a repeal simpliciter was not within the scope  of the  proviso.  The  Court however, stated that  it  was  not necessary  to  give its decision on the said  point  as  the petitioner  in that case would fail on another  ground.  The Court then observed that while the proviso to Article 254(2) does confer on Parliament a power to repeal a law passed  by the State Legislature, that power is, under the terms of the proviso,  subject to certain limitations. It is  limited  to enacting  a law with respect to the same matter  adding  to, amending,  varying or repealing a "law so made by the  State Legislature". The law referred to here is the law  mentioned in the body of Article 254(2). It is a law made by the State Legislature  with  reference to a matter in  the  Concurrent List containing provisions repugnant to an earlier law  made by 652 Parliament and with the consent of the President. It is only such a law that could be altered, amended or repealed  under the proviso. The impugned Act was not a law relating to  any matter,  which is the subject of an earlier  legislation  by Parliament.  It was a substantive law covering a  field  not occupied  by Parliament, and no question of  its  containing any provisions inconsistent with a law enacted by Parliament could  therefore  arise. To such a law, the proviso  had  no application and Section 16(1)(b) of Act X of 1955 and clause 7(1)  of  the Sugar Cane Control Order 1955  must,  in  this view, be held to be invalid. (Sic).     13.  The  aforesaid review of the authorities  makes  it clear that 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  the usual one, namely, to find out the dominant intention of the two  legislations. If the dominant intention, i.e. the  pith and  substance  of the two legislations is  different,  they cover  different  subject matters. If  the  subject  matters covered by the legislations 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. A provision in one legis- lation  to give effect to its dominant purpose may  inciden- tally 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 intend- ed  to be covered by Article 254(2). Both  the  legislations must  be  substantially on the same subject to  attract  the Article.     14.  In  this view of the matter I am of the  view  that there is no repugnancy in the provisions of Sections 14  and 20 of the Karnataka Act and Sections 74 and 80 of the MV Act 1988.  The  petitions  must therefore fail  and  are  hereby dismissed with costs. ORDER     15.  In  view of the decision of the majority  the  Writ

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 29 of 53  

Petitions stand dismissed and the rule in each is discharged with costs.     K.  RAMASWAMY,  J.  1. Despite my  deep  respect  to  my learned  brother, I express my inability to persuade  myself to agree with the result proposed in the draft judgments  of my brothers. 653     The notoriety of open and uninhibited misuse of contract carriage  as stage carriages in picking up and setting  down the  passengers en route the route for hire or reward  sabo- taging  the economic, efficient and  co-ordinated  transport service by the respective State Transport Undertakings  (for short,  "the  S.T.U.") had been taken cognizance of  by  the Karnataka  State Legislature. It provided the remedy  making the  Karnataka Contract Carriages (Acquisition) Act  (21  of 1976), for short, "the Acquisition Act" by taking aid of the Entry 42, List III (Concurrent List) of the Seventh Schedule to  the Constitution and Articles 31, 39(b) and (c)  of  the Constitution.  It  was reserved for  consideration  and  has received  the assent of the President on March 11, 1976.  It came  into  force with effect from March 12,  1976.  Section 3(g)  of the Acquisition Act defines "Contract Carriage"  as one  covered under s. 2(4) of the Motor Vehicles Act  (4  of 1939), for short, "the Repealed Act" including public  serv- ice  vehicle  defined under s. 63(6), etc. s.  3(a)  defines "acquired property"--means the vehicles and other  immovable and  movable property vesting in the State Government  under s. 4 thereof. The Acquisition Act excluded tourist vehicles, motor  cabs,  etc. Section 4 declares that on and  from  the notified date, every contract carriage along with permit  or certificate  of  registration  or  both,  lands,  buildings, workshop,  etc. shall stand vested in the  State  Government free  from  encumbrances. Section 6  provides  machinery  to determine the amount for the vesting of the acquired proper- ty under s. 4. Section 14 which is relevant for the  purpose of this case read thus: "Fresh  permit  or renewal of the  existing  permit  barred- Except as otherwise provided in this Act-- (1) No person shall on or after the commencement of this Act apply  for any permit or fresh permit or for renewal  of  an existing permit for the running of any contract carriage  in the State; and (2)  every  application for the grant of a permit  or  fresh permit  or  for the renewal of the existing permit  and  all appeals or revisions arising therefrom relating thereto made or preferred before the commencement of this Act and pending in  any  Court or with any Officer,  Authority  or  Tribunal constituted under the Motor Vehicles Act shall abate." A reading thereof manifests its unequivocal declaration that on and 654 from  the date of vesting viz., March 12, 1976, the  statute prohibits  any  person  to apply for, any  fresh  permit  or renewal  of an existing permit to run any contract  carriage in  that  State and all applications, appeals  or  revisions pending before the appropriate authority as on the  notified date,  statutorily declared to have been abated. Section  20 declares by employing non-obstenti clause in sub-s. (1) that notwithstanding  anything  in the repealed Act  with  effect from March 12, 1976 all contract carriage permits granted or renewed  in  respect  of any vehicle other  than  a  vehicle acquired  under  the Acquisition Act, or  belonging  to  the S.T.U.,  Karnataka;  or referred to in s. 24  thereof  shall stand  canceled. Sub-s. (2) accords with mandatory  language that  the S.T.U. "shall be entitled for or renewal  of  con-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 30 of 53  

tract  carriage permits to the exclusion of all  other  per- sons"  and  sub-s.  (3) prohibits by  employing  a  negative language  that  "no officer or authority  shall  invite  any application  or  entertain any such application  of  persons other  than the Corporation (S.T.U.) for grant of permit  or the running of the contract carriage." By conjoint operation of ss. 14 and 20, the right of any person other than S.T.U., Karnataka  to apply for and to obtain any permit or  renewal of  an existing permit to run a motor vehicle as a  contract carriage  has  been frozen and issued  statutory  injunction restraining the authority concerned from either inviting  or entertaining  any  application  from him for  the  grant  or renewal  of  contract carriage permit.  Monopoly  to  obtain permit or renewal to run contract carriage was conferred  on S.T.U., Karnataka. The constitutional validity of the Acqui- sition Act was upheld by this Court in State of Karnataka v. Ranganatha Reddy, [1978] 1 SCR 64 1. The contention that the Acquisition  Act fails under Entry 42 of List I  of  Seventh Schedule  to the Constitution, viz., inter-state  trade  and commerce  and  that therefore the State  Legislature  lacked competence to make the Acquisition Act was negatived. It was held that in pith and substance, it is an act of acquisition of  the contract carriages falling in Entry 42 of List  III. It  was further held that the effect of operation of ss.  14 and 20 is incidental or ancillary to the acquisition. Having received  the assent of the President, it is saved  by  Art. 254(2) of the Constitution. When an attempt to obtain renew- al or fresh special permits to run contract carriages taking aid of s. 62(1) or s. 63(6) respectively of the repealed Act 4  of 1939 was made on the ground that the  Acquisition  Act had saved their operation, this Court in Secretary,  R.T.A., Bangalore  v.  P.D.  Sharma, AIR 1989 SC 509  held  that  by operation  of ss. 14 and 20(3), a public service vehicle  be it a contract carriage or stage carriage for which temporary permits  under ss. 62(1) and 63(6) were issued and  were  in force on January 30, 1976 are not entitled to fresh  permits and  exclusive monopoly to run contract carriages was  given to S.T.U., Karnataka. 655     2.  The Motor Vehicles Act, 1988 (Act 59 of  1988),  for short,  "the Act", came into force with effect from July  1, 1989. Section 2(7) defines ’contract carriage’. Section 2(8) defines ’motor vehicle’ or ’vehicle’ to mean any mechanical- ly  propelled vehicle adapted for use upon road whether  the power of propulsion is transmitted thereto from an  external or internal source and includes a chasis to which a body has not  been attached and a trailer  .....  Section  2(34)  de- fines  ’public place’ to mean, a road, street, way or  other place  whether  a thoroughfare or not, to which  the  public have  a right of access and includes any place or  stand  at which  passengers are picked up or set down by a stage  car- riage.  Section  2(35) defines ’public service  vehicle’  to mean,  any motor vehicle used or adapted to be used for  the carriage  of  passengers for hire or  reward,  and  includes a   .....  , contract carriage and stage  carriage.  Section 2(47) defines ’transport vehicle’ to mean, a public  service vehicle   .....  , or a private service vehicle.  Chapter  V deals with Control of Transport Vehicles, s. 66 mandates  an owner  of  a  motor vehicle to obtain permit to  run  it  in accordance with the conditions of a permit thus: "(1) No owner of a motor vehicle shall use or permit the use of  the vehicle as a transport vehicle in any  public  place whether or not such vehicle is actually carrying any passen- gers  or goods save in accordance with the conditions  of  a permit  granted  or countersigned by  a  Regional  Transport

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 31 of 53  

Authority  or any prescribed authority authorising  him  the use of the vehicle in that place in the manner in which  the vehicle is being used." (Emphasis supplied) (The  provisos  are not necessary for the  purpose  of  this case. Hence omitted) Section 73 requires him to make an application for permit of a  contract  carriage with  particulars  specified  therein. Section  74  deals with grant of contract  carriage  permit. Sub-s.  (1) thereof provides that "subject to provisions  of sub-s. (3), a Regional Transport Authority may, on an appli- cation  made  to it under s. 73, grant a  contract  carriage permit  in  accordance  with the application  or  with  such modifications  as  it deems fit or refuse to  grant  such  a permit,  provided  that no such permit shall be  granted  in respect of any area not specified in the application."  Sub- s.  (2) empowers the Regional Transport Authority to  impose any one or more conditions enumerated therein to be attached to the permit, the details thereof are redundant. Sub-s. (3) empowers a State 656 Government,  when  directed by the  Central  Government,  to limit the number of contract carriages generally or a speci- fied  type as may be fixed in the notification published  in this  behalf  for their operation on the  city  routes.  The details are also not necessary for the purpose of this case. Under s. 80(1), an application for a permit of any kind  may be  made  at any time. Sub-s. (2) posits  that  "a  Regional Transport  Authority shah not ordinarily refuse to grant  an application  for permit of any kind made at any  time  under this  Act." (Emphasis Supplied). The proviso are omitted  as not  being relevant. The petitioners have applied under  ss. 73,  74  and 80 of the Act for grant  of  contract  carriage permits.  Placing reliance on ss. 14 and 20 of the  Acquisi- tion  Act, the concerned authorities have refused to  enter- tain their applications. Calling them in question the  above writ petitions have been filed under Art. 32 of the  Consti- tution.     3. The contention of Sri Nariman, learned senior counsel for  the  petitioners, is that the object of the Act  is  to liberalise  grant of contract carriages which do not ply  on any  particular routes. Contract carriage defined  under  s. 2(7)  of  the  Act is a public service  vehicle  within  the meaning  of  s. 2(35) of the Act. Section 66  obligates  the owner  to obtain permits to run contract carriages.  Section 14(1) read with s. 80(1) accords the right to the  petition- ers to apply for, and enjoins the authorities under s. 80(2) to  consider  and  to grant permits to  run  public  service vehicles as contract carriages. Section 217(1) repealed  all the  laws, save such of the laws which are not  inconsistent with the provisions of the Act. The operation of ss. 14  and 20 of the Acquisition Act is inconsistent with ss. 74 and 80 of  the  Act. Grant of permit to run  contract  carriage  is covered  by  Entry 35 of List III of the  Seventh  Schedule. Though, the Acquisition Act was made under Entry 42 of  List III and has received the assent of the President, by  opera- tion of s. 74 read with s. 80 and s. 2 17, the operation  of ss.  14  and 20 became void under proviso  to  Art.  254(2). Sections  14 and 20 also stood repealed by implication.  The authorities are, hereby, enjoined to consider the  petition- ers’ applications for grant of contract carriage permits  as per  the provisions of the Act and the relevant  rules.  Mr. Sanghi,  learned senior counsel for the  S.T.U.,  Karnataka, contended  that the Acquisition Act was made in exercise  of the power under Entry 42 of List III of Seventh Schedule  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 32 of 53  

the Constitution. Its constitutional validity was upheld  by this  Court. It does not occupy the same field as under  the Act. The Acquisition Act, having been reserved for consider- ation  under Art. 254(2) and has received the assent of  the President, it prevails over the Act in the State of Karnata- ka. The Acquisition Act is a "special law" in  juxtaposition to the general law under the 657 Act. The argument of Mr. Sanghi, though apparently at  first blush  is alluring and attractive, but on a deeper probe,  I find insurmountable difficulties in his way to give  accept- ance  to them. The main questions are whether ss. 14 and  20 of  the Acquisition Act and ss. 73, 74 and 80 of the Act  is "in respect of the same matter" and whether the Act  evinces its intention to occupy the same field.     4. At the cost of repetition, it may be stated that  ss. 49  to  51  and the relevant rules under  the  Repealed  Act govern the grant of contract carriage permits and in partic- ular  the rigour imposed in s. 50 thereof is absent  in  the Act.  The  Acquisition  Act aimed to  acquire  the  contract carriages.  They stood vested in the State Government  under s. 4. Incidental and ancillary thereto, the operation of the existing permits or seeking renewal thereof and the pendency of the proceedings in that regard either by way of an appli- cation or in appeal or in revision, having statutorily  been declared  under s. 14(2) to have been abated, the  right  to obtain permits or special permits afresh or renewal  thereof to run contract carriages or stage carriages after expiry of the term, has been frozen to all citizens. Exclusive monopo- ly to obtain permits or of the renewal to run them has  been given to the S.T.U., Karnataka. On and from March 12,  1976, s.  20(3) prohibits the authorities concerned to  invite  or entertain an application or to grant or renew the permits to a contract carriage or special permit, except to the S.T.U., Karnataka. The non-obstenti clause makes clear any cloud  of doubts  of the applicability of the repealed Act 4 of  1939. After the receipt of the assent of the President, though  it is  inconsistent  with the Repealed Act,  its  operation  is saved by Art. 254(2) of the Constitution. Sections 73 and 74 read  with s. 80 of the Act gives to an applicant the  right to  apply  for  and to obtain, and  obligates  the  Regional Transport Authority to grant permit to run any public  serv- ice  vehicle  as contract carriage  throughout  the  country including  the  State of Karnataka. Though, s.  80(1)  gives discretionary power to grant permit but sub-s. (2) of s.  80 manifests  that refusal to grant contract  carriage  permits appears to be an exception for stated grounds and  obviously for reasons to be recorded. 4A. Constitutionalism is the alter to test on its anvil  the constitutionality  of  a statute and Art. 254  is  the  sole fountain  source  concerning a State law in  the  Concurrent List. Article 254(1) deals with inconsistency of law made by Parliament  and the law made by the Legislature of a  State. Clause (1) adumbrates that the existing law, if it is repug- nant  with  the law made by the Parliament, subject  to  the provisions of cl. (2), the law made by the Parliament wheth- er passed before or after the law made by the Legislature of such state, or, as the case 658 may  be, the existing law shall prevail and the law made  by the Legislature of the State shall, to the extent of  repug- nancy,  be void. Clause (2) deals with the law made  by  the Legislature  of a State with respect to one of  the  matters enumerated  in  the Concurrent List contains  any  provision repugnant  to the provisions of an earlier law made  by  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 33 of 53  

Parliament or an existing one "with respect to that matter", then the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the  Presi- dent  and has received his assent, prevails in  that  State; provided  that nothing in this clause shall prevent  Parlia- ment 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. (Emphasis supplied)     5. In a federal system like ours, there are two  streams of  law, viz., Union and State. At times, the  citizen  sub- jected  to both of laws Central and State will  find  incon- sistency  between  the obligations imposed on him  by  those laws or finds variance to avail both laws. In fact, both the Union and State Legislatures are competent to make laws on a subject  enumerated in the Concurrent List. We are not  con- cerned in this case with regard to Union List or State List. it  is quite possible that while legislating upon  the  sub- ject, they might end up in handing down inconsistent law and the  observance of one law may result is  non-observance  of the  other. The citizen will, in such a situation, be  at  a loss  to decide which of the two laws he should  follow.  To resolve  the inconsistency, in other words, to  bring  about operational  uniformity  Constitution presses  into  Service Art.  254.  Its forerunner is s. 107 of  the  Government  of India Act, 1935. Both the Parliament and a State Legislature derive  their power only under Art. 254 and Art.  246(2)  to legislate  concurrently  on the subjects enumerated  in  the Concurrent  List.  The enumeration of the  subjects  in  the Concurrent List is only for demarcation of legislative heads or  distribution  of  the subject/subjects  over  which  the Parliament and the State Legislature have competence to make law. However, paramouncy has been accorded to the Union Law, making provision in Art. 254 firstly as to what would happen in case of repugnancy between the Central and the State  law in  the concurrent field and secondly resolving such a  con- flict.  The reason is that there are certain  matters  which cannot be allocated exclusively either to the Parliament  or to  a  State Legislature and for which, though often  it  is desirable that the State Legislature should make a provision in that regard. Local conditions necessarily vary from State to  State and the State Legislature ought to have the  power to adopt general legislation to meet the particular  circum- stances of a State. It is equally necessary that the 659 Parliament  should also have plenary jurisdiction to  enable it in some cases to secure uniformity in the main principles of  law throughout the country or in other matters to  guide and  encourage the States’ efforts and to  provide  remedies for  mischiefs  arising  in the State  sphere  extending  or liable  to extent beyond the boundaries of a  single  State. The  subjects  like the Indian Penal Code,  Civil  Procedure Code, Criminal Procedure Code, Labour Laws, the Motor  Vehi- cles Act, etc. occupy this area. The essential condition for the application of Art. 254(1) is that the existing law or a law made by the Parliament subsequent to State law, must  be with respect to one of the matters enumerated in the Concur- rent  List.  In  other words, unless it is  shown  that  the repugnancy  is between the provisions of a State law and  an existing  or subsequent law or amended law etc. of the  Par- liament  in respect of the same specified matter,  Art.  254 would be inapplicable,     6.  The Court has to examine in each case  whether  both the  legislations or the relevant provisions therein  occupy

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 34 of 53  

the same field with respect to one of the matters enumerated in  the Concurrent List and whether there exists  repugnance between the two laws. The emphasis laid by Art. 254 is "with respect to that matter". 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  con- sideration 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  excep- tion  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 which  will become void even though it received  President’s assent. In short, cl. (1) lays down a general rule; cl.  (2) is an exception to cl. (1) and proviso qualifies that excep- tion. The premise is that the law made by the Parliament  is paramount  and Union and State law must relate to  the  same subject  matter  in the Concurrent List. It is,  thus,  made clear  that  the  Parliament can always,  whether  prior  or subsequent  to State law, make a law occupied by  the  State law.  An absurd or an incongruous or  irreconcilable  result would  emerge if two inconsistent laws or particular  provi- sions  in a statute, each of equal validity,  could  coexist and operate in the same territory. 660     7.  Repugnancy  between the two pieces  of  legislation, generally  speaking,  means  that  conflicting  results  are produced  when  both  laws are applied to the  same  set  of facts.  Repugnancy arises when the provisions of  both  laws are fully inconsistent or are absolutely irreconcilable  and that it is impossible to obey without disobeying the  other. Repugnancy would arise when conflicting results are produced when  both the statutes covering the same field are  applied to  a given set of facts. The Court should, therefore,  make every attempt to reconcile the provisions of the  apparently conflicting enactments, and would give harmoneous  construc- tion.  There is no repugnancy unless the two Acts or  provi- sions  are  wholly incompatible with each other or  the  two would lead to absurd result. The purpose of determining  the inconsistency  is to ascertain the intention of the  Parlia- ment  which  would be gathered from a consideration  of  the entire  field occupied by the State Legislature. The  proper test is whether the effect can be given to the provisions of both  the laws or whether both the laws can stand  together. There  is  no repugnaney if these two enactments  relate  to different fields or different aspects operating in the  same subject.  In my considered views, Art. 254 was engrafted  in the Constitution by the rounding fathers to obviate such  an absurd  situation.  The reason is obvious that there  is  no provision  in  the  Constitution that the law  made  by  the Parliament is to be void by reason of its inconsistency with the  law made by the Legislature of a State. It may be  dif- ferent  if the State law is only to supplement the law  made by  the Parliament. If both the laws without trenching  upon another’s  field or colliding with each  other  harmoneously operate,  the question of repugnancy does not arise.  It  is also  axiomatic that if no law made by  Parliament  occupies the field, the State Legislature is always free to make  law on  any subject/subjects in the Concurrent List III  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 35 of 53  

Seventh Schedule of the Constitution.     8.  It  is  seen that the Acquisition Act  was  made  in exercise of the power under Entry 42 of the Concurrent  List and ss. 14 and 20 thereof are integral part of the  Acquisi- tion  Act. Undoubtedly, they are consequential or  ancillary to  s. 4 thereof. It had received the assent of  the  Presi- dent. But after the Act was brought on statute, the question emerges whether there exists no repugnancy between ss. 14(1) and  20(3)  of the Acquisition Act in juxtaposition  to  ss. 66(1),  73, 74 and 80 of the Act. Before embarking  upon  an enquiry into the results produced by these provisions in the light  of  above discussion, let us  consider  the  relevant decisions and the ratio laid down therein in this context. 661 Occupied Field:     1n  Tika Ramji v. State of U.P., [1956] SCR  393.  Bhag- wati, J. speaking for the Constitution Bench, applied  three tests propounded by Nicholas in his Australian Constitution, Second  Edition,  page  303, to find  the  inconsistency  or repugnancy  thus.  (1)  There may be  inconsistency  in  the actual terms of competing statutes; (2) Though there may  be no  direct conflict, a State law may be inoperative  because the  Commonwealth  law,  or the award  of  the  Commonwealth Court,  is intended to be a complete and‘  exhaustive  Code; and  (3)  Even in the absence of intention, a  conflict  may arise  when  both State and Commonwealth  seek  to  exercise their  power  over the same subject matter.  (Emphasis  sup- plied). The repugnancy between the two statutes should exist in  fact  and not depend merely on a  possibility.  In  that case,  the question was whether the U.P. Sugarcane  (Regula- tion  of Supply and Purchase) Act (Act 24 of 1953) is  ultra vires of the U.P. Legislature in view of Art. 246 read  with Entry 52 of List I and Item 33 of List III of Seventh Sched- ule  to the Constitution. In that context, it was held  that if both the Central Legislature and the Provincial  Legisla- tures were entitled to legislature in regard to this subject of  production, supply and distribution of sugarcane,  there would  arise  no question of legislative competence  of  the Provincial  Legislature in the matter of having enacted  the impugned Act. Repugnancy falls to be considered when the law made  by the Parliament and the law made by the  Legislature occupy  the  same  field, because if both  these  pieces  of legislation deal with separate and distinct matters,  though of  a  cognate  and allied character,  repugnancy  does  not arise.  (Emphasis  supplied) So far as our  Constitution  is concerned,  repugnancy is dealt with in Art. 254. On a  com- parison of various provisions of the State and Central laws, it was held that there was no question of any  inconsistency in the actual terms of the Act enacted by the Parliament and the impugned Act and they did not occupy the same field.     In  A.S.  Krishna v. Madras State, [1957] SCR  399,  the question  was whether s. 4(2) of the Madras Prohibition  Act which  lays down a presumptive evidence is repugnant to  the Central legislation, viz., Criminal Procedure Code.  Dealing with s. 107 of the Government of India Act, 1935 which is in pari  material to Art. 254 read with Schedule VII, List  II, Items  2 and 31 and List III, Items 2 and 5 of Schedule  VII to the Constitution, Venkatarama Ayyar, J. speaking for  the Constitution  Bench,  held that for applying s. 107  of  the Government  of India Act 1935, two conditions must  be  ful- filled--the  provisions of the provincial law and  those  of the Central legislation must both be in 662 respect  of a matter which is enumerated in  the  Concurrent List;  and they must be repugnant to each other. It is  only

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 36 of 53  

when  both these requirements are satisfied that the  provi- sional  law will to the extent of repugnancy  becomes  void. Section 4(2) of the Prohibition Act was held to be void.     In Prem Nath Kaul v. State of J & K, [1959] 2 Supp.  SCR 273,  another  Constitution Bench held  that  the  essential condition for application of Art. 254(1) is that the  exist- ing law must be with respect to one of the matters enumerat- ed  in  the Concurrent List; in other words,  unless  it  is shown  that  the repugnancy is between the provisions  of  a subsequent  law and those of an existing law in  respect  of the specified matters, the Article would be inapplicable. In Bar  Council of U.P.v. State of U.P., [1973] 2 SCR 1073  the question arose was whether the State Government is empowered to impose stamp duty on the certificate of enrollment  under s.  22  of the Advocates Act. In considering  schedule  VII, List  I, Entries 77, 78 and 96; List II, Entry 63  and  List III,  Entries 44 and 26 and the relevant provisions  of  the Stamp Act and its Schedules, this Court held that the  ques- tion  of  repugnancy can only arise in  respect  of  matters where  both  the parliament and the State  Legislature  have competence  to pass laws. In other words, when the  Legisla- tive  power is located in the Concurrent List, the  question of repugnancy arises. In Deep Chand v. State of U.P., [1959] Supp.  2 SCR 8 relied on by Sri Nariman, the  Uttar  Pradesh legislature  made U.P. Transport Service (Development)  Act, which had received the assent of the President, introduced a scheme  of nationalisation of the transport service.  Subse- quently,  Parliament  has  amended Act IV  of  1939  through Amendment  Act 100 of 1956. By reason thereof, it  was  con- tended that the U.P. Amendment Act became void by reason  of Art. 254 of the Constitution. The matter was examined by the Constitution Bench of this Court. Subba Rao, J. (as he  then was)  per  majority, while considering  the  question,  laid three  propositions  to determine the repugnancy  thus:  (1) Whether  there is direct repugnancy between the  two  provi- sions;  (2) Whether Parliament intended to lay down  an  ex- haustive code in respect of the subject matter replacing the Act  of the State Legislature; and (3) Whether the law  made by the Parliament and the law made by the State  Legislature occupy the same field. After examining in detail the  provi- sions  of  the respective Acts, it was held that  after  the Central  Amendment  Act 100 of 1956, it prevailed  over  the U.P. Act and prospectively became void as the Central Amend- ment  Act  occupied the same field in respect  of  the  same schemes  initiated under the U.P. Amendment Act and to  that extent  the  State Act must yield its place to  the  Central Act. 663     In  State of Orissa v.M.A. Tulloch & Co., [1964]  4  SCR 461  another Constitution Bench of this Court held that  the inconsistency may be demonstrated not by a detailed compari- son of provisions of the two statutes but by the mere exist- ence of the two pieces of legislation. Meeting the  argument as  to on which Entry in the list the subject falls, it  was held thus: "If  by reason of the declaration by Parliament  the  entire subject matter of ’conversation and development of minerals’ has been taken over for being dealt with by Parliament, thus depriving  the  State of the power which it  therefore  pos- sessed, it would follow that the ’matter’ in the State  List is, to the extent of the declaration, (substracted from  the scope of the declaration) and ambit of Entry 23 of the State List.  There  would, therefore after the Central Act  67  of 1957,  be  no matter in the List to which the fee  could  be related in order to render it valid."

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 37 of 53  

It was accordingly held that the Orissa Mining Areas  Devel- opment  Fund Act (27 of’ 1952) to be void. Of  course,  this was in considering the question under Article 246, Entry  54 of List I, and Entry 23 of List 11.     In State of Assam v. Horizon Union, [1967] 1 SCR 484 the facts  are  that  under the Industrial  Disputes  Act  1947, Section  7-A(3)(a) provided that the appropriate  Government may  by notification constitute an Industrial Tribunal  con- sisting  of  one person to be appointed by  the  appropriate Government.  The person shall not be qualified for  appoint- ment  as presiding officer of the Tribunal unless he  is  or has  been a Judge of a High Court or he has held the  office of  Chairman  or any other member of  the  Labour  Appellate Tribunal  constituted under the Industrial Disputes  (Appel- late  Tribunal) Act, 1950, or of any Tribunal, for a  period of  not  less than two years. Assam Act 8 of  1962  made  an amendment to the above procedure and had received the assent of  the  President, introducing clause (aa)  to  sub-section (3)(a) of Section 7-A thus: "He  has  worked  as a District Judge or  as  an  Additional District  Judge  or as both for a total period of  not  less than three years or is qualified for appointment as a  Judge of a High Court; provided that the appointment to a Tribunal of any person qualified under this clause shall not be  made without consultation with the Assam High Court." 664     In 1964, the Parliament made an amendment viz. Industri- al  Disputes (Amendment) Act (36 of 1964)  amending  Section 7-A(3)(a)  stating  that "he has, for a period of  not  less than  three  years, been a District Judge or  an  Additional District  Judge." The contention raised was that  the  Assam Act became void by reason of the subsequent Amendment Act of 1964.  Both  the Parliament and the State  Legislature  have exercised  their  power  under the Concurrent  List  of  VII Schedule. Another Constitution Bench of this Court has  held that the Central Amendment Act 36 of 1964 intended to be  an exhaustive  code in respect of the subject matter and  occu- pies the same field. Therefore, the Assam Act 8 of 1962  was repugnant to the Central Amendment Act 36 of 1964 as it does not  require  the consultation with the High Court  for  the appointment  of an Industrial Tribunal. Accordingly, it  was held to be void.     In  State ofJ & K v.M.S. Farooqi, [1972] 3 SCR  881  the facts  were that the respondent was a member of  the  Indian Police Service governed by the All India Services Act,  1951 and  the All India Services (Discipline and  Appeal)  Rules, 1955. They provided an exhaustive procedure to enquire  into the  misconduct by a member of the All India  Services.  The State  Legislature,  exercising the concurrent  power,  made Jammu and Kashmir Government Servants’ Prevention of Corrup- tion (Commission) Act, 1962. The validity thereof was  ques- tioned  on  the anvil of Article 254  of  the  Constitution. Dealing with the subject, another Constitution Bench, speak- ing through Sikri, C.J. held that the Commission Act  empow- ers to conduct on enquiry into the charges of corruption and misconduct  against  all Government Servants  including  the members of All India Services. In addition to the  recommen- dation for imposition of punishment engrafted in sub-section (2)  of Section 17 of the Commission Act, it also  disquali- fies  for any public office to a specified period  and  also recommendation for prosecution for an offence in a Court  of law. These details were not dealt with under the Central Act and the Rules. From this conspectus, this Court further held thus: "It  seems to us that in so far as the Commission Act  deals

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 38 of 53  

with the infliction of disciplinary punishments it is repug- nant to Discipline and Appeal Rules. Parliament has occupied the field and given clear indication that this was the  only manner  in  which any disciplinary action  should  be  taken against the members of the All India Services 665 Accordingly it was held that the State Act must be read down so as to leave the members of the All India Services outside its  purview.  Thereby, by implication it was held  that  by operation of Article 254 of the Constitution the  Commission Act is repugnant to the All India Services Act and Rules.     In  Kerala State Electricity Board v.  Indian  Aluminium Co.,  [1976]  1 SCR 552 another Constitution Bench  of  this Court held that: "Having  discussed the question of the legislative field  it might  be necessary to discuss the question as to what  hap- pens  if it should be held that the matter under  considera- tion  in these cases falls within the concurrent list,  that is, Entry 38 in List III as contended in the alternative  by some  of the respondents. As already mentioned the  question will  arise only if it should be held that the Kerala  State Act falls under Entry 38 as contended by Mr. B. Sen. If  the impugned legislation falls under List III then the  question of  repugnancy of that legislation with the existing law  or the law made by Parliament as the case may be, will have  to be considered."     In  Basu’s  Commentary  on  the  Constitution  of  India (Silver  Jubilee  Edition),  Volume K, at page  144,  it  is stated that "the repugnancy to be found is the repugnancy in the actual provisions of two laws and not 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." (Emphasis added). It is trite  law that the form of the provision does not conclude the matter. It must be the "same matter" under consideration. Operational Incompatibility:     9. Repugnancy could also be angulated from the  perspec- tive of operational incompatibility as well. The  celebrated decision in Clyde Engineering Co. v. Cowburn, [1926] 37  CLR 466 popularly known as 44-hour case, is a leading  authority on  this  topic. The facts therein are that  a  Commonwealth Arbitration  award  fixed rates of pay and overtime  on  the basis of 48-hour working week while Forthfour Hours Week Act 1925  (NSW) S. 6 purported to deal with the same  matter  on the basis of 44-hours working week. The respondent  employee claimed  the  State Act rate of pay but was  denied  on  the basis  of  48-hours working week. When  questioned,  it  was argued that there was no 666 inconsistency  between the award and the State  Act  because the employer, it was said, could obey both laws by observing the  44-hours  working week but on the basis  that  the  pay scale determined by the award applied to the 44-hours  work- ing  week. The High Court of Australia relying on s. 109  of Australian Constitution rejected the argument and found that an inconsistency existed, as the State law operated to  vary the  adjustment of industrial relations established  by  the Commonwealth award. Knox, C.J. held that two enactments  may be  inconsistent although obedience to each of them  may  be possible  without disobeying the other. Statute may do  more than impose duties; they may for instance confer rights; and one statute is inconsistent with another when it takes  away a right conferred by the other even though the right may  be one  which might be waived or abandoned  without  disobeying the  statute which conferred it. Issacc, J. in his  separate

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 39 of 53  

but concurrent judgment held: "The vital question would be: was the second Act in its true construction intended to cover the whole ground, and  there- fore,  to supersede the first? If it was intended, then  the inconsistency  would consist in giving operative  effect  at all  to the first Act; because the second was  intended  en- tirely  to exclude it. The suggested test however  useful  a working  guide it may be in some cases prove a test;  cannot be recognised as the standard measuring rod of  inconsisten- cy.  If, however, a competent legislature expressly  or  im- pliedly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another legisla- ture   assumes  to  enter  to  any  extent  upon  the   same field  ...... If  such a position as I have postulated be in  fact  estab- lished  the inconsistency is demonstrated not by  comparison of detailed provisions but by the existence of the two  sets of  provisions; where that wholesale inconsistency does  not occur but the field in partly open, then it is necessary  to enquire further and possibly to examine and contrast partic- ular  provisions.  If one enactment makes or  acts  upon  as lawful that which the other makes unlawful or if one  enact- ment makes unlawful that which the other makes or acts  upon as  lawful,  the two or to that extent inconsistent.  It  is plain  that it may be quite possible to obey both simply  by not doing what is declared by either to be unlawful and  yet there  is palpably inconsistency. The basic reason  is  that the 667 Constitution  clearly  intended that once  the  Commonwealth settled  an interstate dispute, that settlement shall  stand and  that  its terms should be framed by the one  hand,  the other  being  necessarily excluded. Forty-four  hours  shall constitute  a  week’s work. No day’s work to  exceed  either hours without payment for overtime, etc." Higgins, J. has held that: "When is a law inconsistent with another law? Etimologically I  presume  that things are inconsistent  when  they  cannot stand together at the same time and law is inconsistent with another  when the command or power or provision in  one  law conflicts  directly with the command, power or other  provi- sion  of  another. Where two legislations operate  over  the same territory and came into collision, it is necessary that one should prevail, but the necessity is confined to  actual collision  as one legislature says ’do’ and the  other  says ’do not’. (Emphasis supplied) In that case it was held that there is operational incompat- ibility  between the Commonwealth award and the  State  law. The State law was held to be void.     In  Hume  v. Palmer, [1926] 38 CLR 441  both  New  South Wales  Act  and Commonwealth Act authorised  making  of  the Regulations  dealing with collisions at sea. In  both  cases regulations  had  been made. They were  in  identical  terms except  that in relation to the jurisdiction to convict  for breaches. The New South Wales regulations prescribed summary prosecution  and a maximum penalty of Pound 50  whereas  the Commonwealth  regulations prescribed summary prosecution  on indictment and a maximum penalty Pound 100. It was held that the  same facts produced different legal results  under  the two Acts, the penalty under State law was held displaced.     In  R.v.  Brisbane Licensing Court, [1920] 28 CLR  23  a section of the Commonwealth Electoral Act provided that on a polling  day fixed for a federal election, a  referandum  or vote of the electors of a State or part thereof, should  not

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 40 of 53  

be  taken. A local option poll had been taken on such a  day under  Queensland  legislation. It was held  that  a  direct inconsistency  existed, and that the local option poll  was, therefore,  declared  to be invalid. In  Colvin  v.  Bradley Bros. Pvt. Ltd., [1943] 68 668 CLR  151  an order made pursuant to a section of  New  South Wales Factories and Shops Act prohibiting the employment  of women  on a milling machine. An award had been made  by  the Commonwealth  Arbitration Court under the  Conciliation  and Arbitration Act which permitted the employment of females on work,  which included work on a milling machine, unless  the work  was declared to be unsuitable for women by a Board  of Reference.  No such declaration had been made by the  Board. it  was held that the order was inconsistent with the  award by virtue of s. 109 in that it directly prohibited something which the Commonwealth award permitted. In  In Re Ex Parte Maclean, [1930] 43 CLR 472 at 483.  Dixon J. held: "When the Parliament of the Commonwealth and the  Parliament of  a  State each legislate upon the same subject  and  pre- scribe  what the rule of conduct should be, they  make  laws which  are  inconsistent notwithstanding that  the  rule  of conduct  is  identical, which each prescribes,  and  s.  109 applies." It was further held that the Federal statute had evinced  an intention  to cover the subject matter and provide what  the law upon it should be.     In Wenn v. Attorney General (Victoria), [1948] 77 CLR 84 the  Re-establishment  and  Employment Act  dealt  with  the obligations of employers’ to give preference to  ex-service- men in employment (but included no provision as to the  duty to  give  preference in promotion to  ex-servicemen  already employed).  The State Act dealt not only with the same  mat- ter,  but also included a provision requiring  employers  to give preference in promotion. It was held that  Commonwealth Legislation was an exhaustive code allowing no room for  the operation  of the State legislation relating to  matter  not covered  by the Commonwealth Act. The Victorian  Law  giving preference  in promotion was, therefore, held to  have  been displaced.     In O’Sullivan v. Noarlunga Meat Co. Ltd., [1954] 92  CLR 565  the facts are that the South Australian Act  prohibited laughter  of stock for export without a State licence  while the  Commonwealth Act prohibited export of meat  from  stock which had not been slaughtered on premises registered  under the  regulations  thereof. In an evenly divided  Court,  the opinion of the Chief Justice had prevailed, it was held that the  Commonwealth regulations were detailed enough  to  show that 669 they covered the whole field of ’slaughter for export’  and, therefore, the State licensing requirement did not apply. On further  appeal  the Judicial Committee in  O.  Sullivan  v. Noarlunga  Meat Co. Ltd., [1957] AC 1 at 28 added  that  "in applying this principle it is important to bear in mind that the  relevant  field or subject is that covered by  the  law said to be invalid."     In  Australian  Federal  Constitutional  Law  by  Collin Howard,  Second  Edition (1972). at page 27, it  was  stated that  where both a Commonwealth Law and a State law  are  in terms  applicable to a given set of facts, and they  produce conflicting  legal results on those facts, the  Commonwealth law applies and not the State law. In Blackley v.  Devondale Cream  (Vie.) Pvt. Ltd., [1968] 117 CLR 253, a  State  wages

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 41 of 53  

determination  prescribed a minimum rate of pay for  certain work  which  was also covered by a Commonwealth  award.  The Commonwealth  award prescribed a lower minimum rate. It  was held  that there was a direct inconsistence because  on  the same facts the two laws produced different entitlements. The award rate, therefore, prevailed over the State’s determina- tion. 10. REPEAL BY IMPLICATION: Sub-s. (1) of s. 217 of the Act repeals thus: "The Motor Vehicles Act, 1939, and any law corresponding  to that  Act in force in any State immediately before the  com- mencement of this Act (hereafter in this section referred to as the repeal enactments) are hereby repealed." (The other sub-sections are not relevant. Hence omitted. )                                                    (Emphasis supplied) Thereby  s.217(1) does not expressly repeal  sections  14(1) and 20(3) of the Acquisition Act. In Zaveribhai v. State  of Bombay, [1955] 1 SCR 799 relied on by Sri Nariman, the facts were that s. 7 of the Essential Supplies (Temporary  Powers) Act,  1949  provides  penalty for  contravention  of  orders issued under s. 3 for a term of three years or with fine  or with both. The Bombay Legislature amended the Act, by Act 52 of  1950.  Section 2 of the Amendment Act provides  that  ’- notwithstanding  anything  contained in  Essential  Supplies (Temporary  Powers) Act, 1946, whoever contravenes an  order made  under  Sec.  3 of the  Essential  Supplies  (Temporary Powers)  Act,  shall be punishable with imprisonment  for  a term which may extend to seven years but shall not, 670 except  for reasons to be recorded in writing, be less  than six  months  and shall also be liable to  fine".  Thus,  the Bombay Act imposes minimum sentence while indicating maximum sentence  and obtained the assent of the  President.  Later, the Central Act was amended in 1948, 1949 and 1950. In  1950 Act,  Sec. 7 categorised three groups of  offences  covering the same field and imposd graded sentences depending on  the character  of  the offence and the nature of  the  commodity contravened.  The  Bombay Act was challenged on  the  ground that  it  was  repugnant and was  repealed  by  implication. Venkatarama  Iyer,  J. speaking for the  Constitution  Bench held that repugnancy might result when both the legislations cover the same field. It was further held: "The  important  thing to consider with  reference  to  this provision  is whether the legislation in ’in respect of  the same  matter.’ If the later legislation deals not  with  the matters which formed the subject of the earlier  legislation but with other and distinct matters though of a cognate  and allied character, then Art. 254(2) will have no application. The principle embodied in s. 107(2) and Art. 254(2) is  that when  there is legislation covering the same ground both  by the Centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State." It was further held that though there is no express  repeal, even then the State law will be void under the proviso if it conflicts  with  later law with respect to the  same  matter that  may  be enacted by the Parliament.  The  principle  on which the rule of implied repeal rests, namely, that if  the subject  matter of later legislation is identical with  that of the earlier, so that they cannot both stand together then the  earlier  is repealed by the later  enactment,  will  be equally applicable to a question under Art. 254(2) where the further legislation by Parliament is in respect of the  same matter  as that of the State law. Accordingly, it  was  held

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 42 of 53  

that Sec. 2 of the Bombay Act, No. 36 of 1947 cannot prevail as  against  Sec.  7 of the  Essential  Supplies  (Temporary Powers) Act as amended by Act 52 of 1950.     The doctrine of repugnancy and implied repeal was  again considered  by  this  Court in M. Karunanidhi  v.  Union  of India,  [1979]  3 SCR 254 where the Tamil  Nadu  Public  Men (Criminal  Misconduct)  Act (2 of 1974) was assailed  to  be repugnant  to  the Indian Penal Code and the  Prevention  of Corruption  Act  1947. In considering that  question,  Fazal Ali, J. speaking for the Constitution Bench held: 671 "...  So far as the Concurrent List is concerned, both  Par- liament 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 Art. 254(1). Where  the provisions of the Central Act and a State Act  in the Concurrent List are fully inconsistent and are absolute- ly  irreconciliable,  the Central Act will prevail  and  the State Act will become void in view of the repugnancy. Where, however, a law passed by the State comes into  colli- sion  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 CI. (2) of Art. 254. Where  a law passed by the State Legislature the entries  in the  State  List entrenches upon any of the entries  in  the Central  List the consitutionality of the law may be  upheld by invoking the doctrine on a subject covered by the Concur- rent  List is inconsistent with and repugnant to a  previous law made by the Parliament, then such a law can be protected by  obtaining the assent of the President under Art.  254(2) of  the Construction. 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 their 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  amend- ing, varying or repealing the law made by the State Legisla- ture under the proviso to Article 254." Dealing  with the question of repeal by implication, it  was held  that  there  is no repeal by  implication  unless  the inconsistency  appears on the face of the two statutes  that where two statutes occupy a particular field but there is  a room  or possibility of both the statutes operating  in  the same field without coming into collision with each other, no repugnancy results and that where there is no inconsistency, a statute occupying the same field seeks to create  distinct and  separate offence, no question of repugnancy arises  and both the statutes continue to operate in the same field.  On a comparison of the relevant provisions of the ,impugned Act and the Central Acts, it was not repealed by implication. 672     In T. Barai v. Henry Ah Hoe, [1983] 1 SCR 905 relied  on by.  Sri  Nariman, the facts are that for an  offence  under Sec.  16(1)(a)  read with Sec. 7 of the Prevention  of  Food Adulteration Act, 1954, prescribed maximum punishment of six years.  But the West Bengal Legislature amended the  Central Act  with  effect from April 29, 1974 by the  Prevention  of Adulteration  of  Food, Drugs and  Cosmatics  (West  Bengal) (Amendment)  Act, 1973, providing punishment with  imprison- ment  for  life and triable by a Court of Sessions.  It  had received  the assent of the President. Later on the  Parlia- ment amended the Section (Section 16(a) and also  introduced Section 16-A in 1976 to the Prevention of Food  Adulteration

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 43 of 53  

Act,  1954,  imposing punishment of three  years.  Both  the enactments  have  been made in exercise  of  the  concurrent power.  In  considering the question whether the  State  Act became  void, A.P. Sen J. speaking for three  Judges’  Bench has held thus: "There  is no doubt or difficulty as to the law  applicable. Art. 254 of the Constitution makes provision firstly, as  to what would happen in the case of conflict between a  Central and State Law with regard to the subjects enumerated in  the Concurrent List. and secondly, for resolving such  conflict, Art. 254(1) enunciates the normal rule that in the event  of a conflict between a Union and a State Law in the concurrent field, the former prevails over the latter. Clause (1)  lays down that if a State law relating to a concurrent subject is ’repugnant’  to a Union law relating to that subject,  then, whether  the Union law is prior or later in time, the  Union law  will prevail and the State law shall. to the extent  of such  repugnancy, be void. To the general rule laid down  in Clause (1), Clause (2) engrafts an exception, viz., that  if the President assents to a State law which has been reserved for  his consideration, it will prevail notwithstanding  its repugnancy to an earlier law of the Union, both laws dealing with  a concurrent subject. In such a case, the Central  Act will give way to the State Act only to the extent of  incon- sistency between the two, and no more. in short, the  result of  obtaining  the assent of the President to  a  State  Act which is inconsistent with a previous Union law relating  to a  concurrent subject would be that the State Act will  pre- vail  in that State and override the provisions of the  Cen- tral  Act  in their applicability to that  State  only.  The predominance of the State law may, however, be taken away if Parliament  legislate under the proviso to Clause  (2).  The proviso to Art. 254(2) empowers the Union Parliament to 673 repeal  or  amend a repugnant State law even though  it  has become valid by virtue of the President’s assent. Parliament may repeal or amend the repugnant State law, either  direct- ly,  or by itself enacting a law repugnant to the State  law with  respect to the ’same matter’. Even though  the  subse- quent  law  made by Parliament does not expressly  repeal  a State law, even then, the State law will become void as soon as  the subsequent law of Parliament creating repugnancy  is made.  A State law would be repugnant to the Union law  when there  is direct conflict between the two laws. Such  repug- nancy  may  also arise where both laws operate in  the  same field and the two cannot possibly stand together, e.g. where both  prescribe  punishment  for the same  offence  but  the punishment  differs  in degree or kind or in  the  procedure prescribed,  In all such cases, the law made  by  Parliament shall  prevail  over the State law under Art.  254(1).  That being so, when Parliament stepped in and enacted the Central Amendment  Act,  it being a latter law  made  by  Parliament ’with respect to the same matter’, the West Bengal Amendment Act stood impliedly repealed."     In  M/s Hoeshst Pharmaceuticals Ltd. v. State of  Bihar, [1983]  3  SCR 130 the Bihar Finance Act, 1981 was  made  in exercise  of the power under Entry 54 of List II of  Seventh Schedule  to  the Constitution amending  and  repealing  the previous  Act providing therein to levy tax on sale or  pur- chase  of goods. Section 5(1) imposes levy of  surcharge  on every  dealer  whose gross turnover during an  year  exceeds Rupees Five lakhs, in addition to the tax payable by him  at such  rate not exceeding 10 per cent of the total amount  of tax.  Sub-s. (3) of s. (5) prohibits such dealer  from  col- lecting  the  amount of surcharge from the  purchasers.  The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 44 of 53  

Essential Commodities Act made under Entry 33 of the Concur- rent List III empowering the Government to fix prices of the essential  commodities including drugs, medicines,  etc.  It was  contended that by operation of sub-s. (1) of s. 5,  the State  Act  is repugnant and is void.  In  considering  that question, A.P. Sen, J. speaking for three Judges’ Bench held that  both the Union and the State Legislature have  concur- rent  powers of legislation with respect to any of the  mat- ters  enumerated  in List 111, subject only to  the  proviso contained  in el. (2) of Art. 254, i.e. provided  the  State Act  do  not conflict with those of any Central Act  on  the subject   ....  The question of repugnancy arises only  when both  legislatures are competent to legislature in the  same field, i.e. when both Union and the State laws relate 674 to  a  specified  subject in List III and  occupy  the  same field.  Yet another place it was held that it is  only  when both  these  requirements are fulfilled that the  State  law will,  to the extent of repugnancy became void. Art.  254(1) has  no application to the cases of repugnancy due to  over- lapping  found between List II on the one hand and  Lists  I and  II  on  the other. If such overlapping  exists  in  any particular  case, State law will be ultra vires  because  of the  non  obstenti clause in Art. 246(1) read  with  opening words--"Subject  to" Art. 246(3). In such cases,  the  State law  will fail not because of repugnance in the  Union  List but due to want of legislative competence. Repugnancy arises where  there is a direct conflict or collision  between  the Central  Act and the State Legislation and to the extent  of repugnancy by necessary implication or by express  reference the State legislation stands repealed."     11. It is true, as tightly contended by Mr. Sanghi, that ss. 14 and 20 are consequential or ancillary to s. 4 of  the Acquisition Act 21 of 1976 which had received the assent  of the  President.  Its constitutionality was upheld  by  seven Judges’ Bench of this Court, when the legislative competence was  assailed  on  the anvil of Entry 42 of List  I  of  the Seventh  Schedule, but not on the touchstone of  proviso  to cl.  (2)  of Art. 254 which gives overriding  power  to  the Parliament to make any law or amend, vary, modify or  repeal the  law  made by a State  Legislature.  Ranganatha  Reddy’s ratio, thereby, does not stand an impediment to go into  the validity of ss. 14 and 20 of the Acquisition Act.     12.  The  result of the above discussion  leads  to  the following conclusions: (a)  The doctrine of repugnancy or inconsistency under  Art. 254  of  the Constitution would arise only when the  Act  or provision/  provisions in an Act made by the Parliament  and by a State Legislature on the same matter must relate to the Concurrent List III of Seventh Schedule to the Constitution; must  occupy  the same field and must be repugnant  to  each other; (b) In considering repugnance under Art. 254 the question of legislative competence of a State Legislature does not arise since  the  Parliament and the Legislature of a  State  have undoubted  power and jurisdiction to make law on a  subject, i.e. in respect of that matter. In other words, same  matter enumerated in the Concurrent List has occupied the field. (c) If both the pieces of legislation deal with separate and dis- 675 tinct matters though of cognate and allied character  repug- nancy does not arise. (d)  It matters little whether the Act/Provision  or  Provi- sions in an Act falls under one or other entry or entries in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 45 of 53  

the  Concurrent  List.  The substance of  the  "same  matter occupying the same field by both the pieces of the  legisla- tion is material" and not the form. The words "that  matter" connotes  identity of "the matter" and not their  proximity. The  circumstances  or motive to make the  Act/Provision  or Provisions in both the pieces of legislation are irrelevant. (e)  The  repugnancy to be found is the repugnancy  of  Act/ provision/Provisions of the two laws and not the predoninant object of the subject matter of the two laws. (f)  Repugnancy or inconsistency may arise in diverse  ways, which are only illustrative and not exhaustive: (i)  There may be direct repugnancy between the  two  provi- sions; (ii) Parliament may evince its intention to cover the  whole same  field  by laying down an exhaustive  code  in  respect thereof displacing the State Act, provision or provisions in that Act. The Act of the Parliament may be either earlier or subsequent to the State law; (iii) Inconsistency may be demonstrated, not necessarily  by a detailed comparison of the provisions of the two pieces of law but by their very existence in the statutes; (iv) Occupying the same field; operational  incompatibility; irreconcilability or actual collision in their operation  in the same territory by the Act/provision or provisions of the Act  made  by the Parliament and their counter  parts  in  a State law are some of the true tests; (v)  Intention  of the Parliament to occupy the  same  field held  by the State Legislature may not be  expressly  stated but  may be implied which may be gethered by examination  of the relevant provisions of the two pieces of the legislation occupying the same field; 676 (vi) If one Act/Provision/Provisions in an Act makes  lawful that  which  the  other declares unlawful the  two  to  that extent  are inconsistent or repugnant. The  possibility  of. obeying  both  the laws by waiving the  beneficial  part  in either set of the provisions is no sure test; (vii)  If the Parliament makes law conferring  right/obliga- tion/ privilege on a citizen/person and enjoins the authori- ties  to obey the law but if the State law denies  the  self same rights or privileges negates the obligation or  freezes them and injuncts the authorities to invite or entertain  an application  and to grant the right/privilege  conferred  by the  Union law subject to the condition imposed therein  the two  provisions  run on a collision  course  and  repugnancy between the two pieces of law arises thereby; (viii)  Parliament  may  also 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  operation  etc.  anti conflicting  results  would  ensue when both  the  laws  are applied to a given same set of facts or cannot stand togeth- er or one law says do and other law says do not do. In other words,  the Central law declares an act or  omission  lawful while the State law says them unlawful or prescribes  irrec- oncilable penalties/punishments of different kind, degree or variation in procedure etc. The inconsistency must appear on the  face  of  the  impugned   statutes/provision/provisions therein; (ix)  If  both the pieces of provisions occupying  the  same field do not deal with the same matter but distinct,  though cognate or allied character, there is no repeal by  implica- tion; (x)  The Court should endeavour to give effect to  both  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 46 of 53  

pieces of legislation as the Parliament and the  legislature of a State are empowered by the Constitution to make laws on any  subject or subjects enumerated in the  Concurrent  List III  of Seventh Schedule to the Constitution. Only  when  it finds  the  incompatibility or  irresconcilability  of  both Acts/provision  or provisions, or the two laws cannot  stand together, the Court is entitled to declare the State law  to be void or repealed by implication; and (xi) The assent of the President of India under Art.  254(2) given  to a State law/provision, provisions  therein  accord only opera- 677 tional  validity though repugnant to the Central law but  by subsequent law made by the Parliament or amendment/modifica- tion,  variation or repeal by an act of  Parliament  renders the State law void. The previous assent given by the  Presi- dent does not blow life into a void law. Scope  and operation of Rule of Pith and Substance and  pre- doninant purpose vis-a-vis Concurrent List.     13.  The  further question is whether the  doctrines  of dominant purpose and pith and substance would be applied  to the matter covered under the Concurrent List. in my  consid- ered  view,  they  do not apply. The doctrine  of  pith  and substance primarily concerns in determining the  legislative competence. The idea underlying the detailed distribution of legislative powers in three Lists was to ensure that Parlia- ment  and State Legislatures should keep  themselves  within the  spheres allocated to them in List I and vice  versa  in List II respectively. However, legislation is a very compli- cated matter as it reflects life, which itself is a  compli- cated  one.  Hence, it is sometimes inevitable  that  a  law passed  by the Parliament may trench upon the domain of  the State  Legislature  and vice versa.  Would  such  incidental encroachment  on the territory of the other invalidates  the legislation? In examining this question and finding a  solu- tion, the Courts try to save the legislation from  unconsti- tutionality  by applying the flexible rule of pith and  sub- stance. It is not that the Courts encourage one  legislature to  encroach upon the legislative field of another  legisla- ture  but  merely  recognise the reality  that  despite  the strict  demarcation  of  legislative  fields  to  respective legislatures,  it  is not always possible  to  effectuate  a legislative  purpose  without  incidental  encroachment   on another’s field. In such a situation the Courts try to  find out the pith and substance of the legislation. If the legis- lation is found in its pith and substance, within the legis- lative competence of the particular legislature, it is  held to be valid, despite incidental encroachment on the legisla- tive  power of another legislature. Thus, the rule  of  pith and  substance is applied to determine whether the  impugned legislation is within that competence under Arts. 246(1) and 246(3)  of the Constitution, and to resolve the conflict  of jurisdiction. If the Act in its pith and substance falls  in one  List  it must be deemed not to fall  in  another  List, despite  incidental encroachment and its validity should  be determined accordingly. The pith and substance rule,  there- by, solves the problem of overlapping of "any two entries of two  different  List vis-a-vis the Act" on the basis  of  an inquiry into the "true nature and character" of the legisla- tion.  The  Court examines the legislation as  a  whole  and tries 678 to find whether the impugned law is substantially within the competence  of the Legislature which enacted it, even if  it incidentally trespasses into the legislative field of anoth-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 47 of 53  

er Legislature. In a case where the question of validity  of an  act  arises,  it may be that the  topic  underlying  the provisions  of the Act may in one view of the  matter  falls within  the power of the Centre, and on another view  within the power of the States. When this happens, it is  necessary to  examine the pith and substance of the impugned  legisla- tion; and to see whether in its pith and substance it  fails within one, or the other of the Legislative Lists. As stated earlier  the  constitutionality of the Impugned Act  is  not determined  by the degrees of invasion into the  domain  as- signed  to the other legislature but its pith and  substance and its true nature and character to find whether the matter fails  within  the domain of the enacting  legislature.  The incidental  or ancillary encroachment into  forbidden  field does  not effect the competence of the legislature  to  make the impugned law.     14.  From this scenerio let us peep into  few  important decisions touching the subject. In Prafulla Kumar v. Bank of Commerce,  Khulna, AIR 1947 PC 60 the question  was  whether the  Bengal Moneylenders Act (10 of 1940) is ultra vires  by reason  of Schedule 7, List II, Items 28 and 38 of the  Gov- ernment of India Act, 1935, and thereby is void. In  consid- ering  that question, the Judicial Committee held as  culled out in Head note (b) thus: "It  is not possible to make a clean cut between the  powers of  the Federal and Provincial Legislatures. They are  bound to  overlap and where they do the question to be  considered is what is the pith and substance of the impugned  enactment and  in  what list is its true nature and  character  to  be found. The extent of invasion by the Provinces into subjects in  Federal  List  is an important matter  not  because  the validity of a Provincial Act can be determined by  discrimi- nating  between degrees of invasion but for determining  the pith and substance of the impugned Act. The question is  not has it trespassed more or less but is the trespass, whatever it  be, such as to show that the pith and substance  of  the impugned  Act is not a Provincial matter but a Federal  mat- ter.  Once  that is determined the Act falls on one  or  the other  side of the line and can be seen as valid or  invalid according to its true import. No doubt where they come in conflict List I has priority 679 over Lists III and II and List III has priority over List II but  in each case one has to consider what the substance  of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character" This  leading  ratio formed foundation  in  countless  cases decided by this Court. In State of Bombay v.F.N. Balsara,  [ 1951] SCR 682 it was held that: "It  is  well  settled that the validity of an  Act  is  not affected if it incidentally trenches on matters outside  the authorised field and, therefore, it is necessary to  enquire in  each  case  what is the pith and substance  of  the  Act impugned.  If the Act, when so viewed,  substantially  falls within  the powers expressly conferred upon the  Legislature which enacted it then it cannot be held to be invalid merely because  it  incidentally encroaches on matters  which  have been assigned to another Legislature." In Atiabari Tea Co. Ltd. v. State of Assam, [1961] 1 SCR 809 Gajendragadkar,  J. (as he then was) speaking per  majority, has explained the purpose of the rule of pith and  substance thus: "The test of pith and substance is generally and more appro- priately applied when a dispute arises as to the legislative competence of the legislature, and it has to be resolved  by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 48 of 53  

reference  to the entries to which the impugned  legislation is  relateable,  when there is a conflict  between  the  two entries  in the legislative list, and legislation by  refer- ence to one entry would be competent but not by reference to other, the doctrine of pith and substance is invoked for the purpose of determining the true nature and character of  the legislation in question." In  Meghraj & Ors. v. Allaharakhiya & Ors., AIR 1942  FC  27 relied  on  by Sri Nariman, the contention raised  was  that when  the  matter in the Concurrent List  had  occupied  the flied  whether  the question of pith and  substance  of  the impugned  Act would arise? The Federal Court held that  when the  Provincial Act is objected to as contravening not  Sec. 100  but  Sec. 107(1) of the Government of India  Act  1935, which  is in pari materia to Art. 254 of  the  Constitution, that the question of pith and substance of the impugned  Act does not arise. In Tika Ramji’s case, the same question  had arisen for resolution. It was held that-- 680 "The  pith.and  substance argument also cannot  be  imported here for the simple reason that when both the Centre as well as  the State Legislatures were operating in the  Concurrent field. there was no question of any trespass upon the exclu- sive  jurisdiction  vested in the Centre under Entry  52  of List  I,  the only question which  survived  being  whether, putting both the pieces of legislation enacted by the Centre and the State legislature together, there was any repugnancy a contention which will be dealt with hereafter."     I  have no hesitation to hold that the doctrine of  pith and substance on the predoninant purpose, or true nature and character of the law have 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 to in which  entry  or entries  in the Concurrent List the subject-matter falls  or in exercise whereof the Act/provision or provisions  therein was  made. The Parliament and Legislature of the State  have exclusive power to legislate upon any subject or subjects in a  Concurrent List. The question of incidental or  ancillary encroachment  or  to trench into forbidder  field  does  not arise. The determination of its ’true nature and  character’ also is immaterial.     15.  Power  to legislate whether derived from  the  con- cerned Articles or legislative lists in Seventh Schedule     16.  Parliament and the Legislature of any state  derive their  power  from Art. 246(2) of the Constitution  to  make laws  with respect to any of the matters enumerated in  List III  of the VIIth Schedule to the Constitution. With a  non- obstanti  clause  engrafted therein  namely  notwithstanding anything in Clause ? the Parliament, and, subject to  Clause 1, the Legislature of any State also have power to make laws with  respect to any of the matters enumerated in List  III. List  III  of Seventh Schedule  enumerates  the  legislative heads  over which the appropriate Legislature  can  operate. The  function of the list is not to confer power  on  either the  Parliament or a State Legislature. Article 254  of  the Constitition removes the inconsistency between the law  made by  the Parliament and by the Legislatures of  States.  Thus the power to legislate on the Concurrent List is derived  by the Parliament and the Legislature of any State from Article 246(2)  read  with Article 254 only. Paramouncy to  the  law made by the Parliament is given by Article 254(1) and provi- so  to Article 254(2). The Parliament derives its  exclusive power under Article 246(1) to legislate upon any of the 681

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 49 of 53  

subjects enumerated in List I of the Seventh Schedule in the Constitution.  Similarly the Legislature of a State  derives its exclusive power from Article 246(3) to make laws on  any matters  in List II. When the Parliament or the  Legislature of  a  State while making legislation within  its  exclusive domain,  namely, List I or List II respectively if it  inci- dentally  trenches  upon the forbidden  flied,  namely,  the field demarcated or distributed to the State Legislature and vice  versa by the Legislature into List I the  doctrine  of Pith and Substance was applied to find the "true purpose and character  of the Legislation". In considering the  question of the doctrine of Pith and Substance in Subrahmanyam  Chet- tiar  v.  Muttuswami Goundan, A.I.R. 1941 F.C. 47 at  p.  51 held  that it must inevitably happen from time to time  that legislation, though purporting to deal with a subject in one list,  touches  also on a subject in another list,  and  the different  provisions  of the enactment may  be  so  closely intertwined that blind adherence to a strictly verbal inter- pretation  would result in a large number of statutes  being declared  invalid because the Legislature enacting them  may appear  to have legislated in a forbidden sphere. Hence  the rule which has been evolved by the Judicial Committee where- by  the impugned statute is examined to ascertain its  "pith and substance", or its "true nature and character", for  the purpose  of determining whether it is legislation  with  re- spect  to matters in this list or in that. In that case  the question was whether the Madras Agriculturists Relief Act  4 of  1938, Section 8 thereto is invalid, since the matter  is in  Schedule  VII, List I or List II of  the  Government  of India  Act,  1935. The contention was  that  the  negotiable instrument;  promissory notes are covered by List I  of  the Seventh Schedule, therefore, the Act is invalid. In  consid- ering that question and negativing the contention the  above ratio was enunciated. (emphasis supplied) In Governor General in Council v. The Reliegh Investment Co. Ltd.,  [1944] F.C.R. 229 at p. 261 in considering the  ques- tion whether the Federal Legislature’s power is not  limited to cases specified in clauses (a) to (e) of sub-section  (2) of Section 99 from Entry No. 23 of the List I of the Seventh Schedule;  it was held by Spens, C.J. that it would  not  be right that the Legislature would derive the power to  legis- late  on this topic merely from the reference to it  in  the List, because the purpose of the Lists was not to create  or confer  powers, but only to distribute between  the  Federal and  the Provincial Legislatures, the powers which had  been conferred by Section 99 and 100. (emphasis added) 682     In  Harakchand  Ratanchand Banthia v.  Union  of  India, [1970]  1 SCR 479 at p. 489 the Constitution Bench  speaking through  Ramaswami, J. dealing with the Gold  (Control)  Act (45 of 1968) observed thus: "Before construing these entries it is useful to notice some of the well-settled rules of interpretation laid down by the Federal Court and by this Court in the matter of  construing the  entries. The power to legislate is given to the  appro- priate  legislature by Article 246 of the Constitution.  The entries  in  the three Lists are only legislative  heads  or fields  of legislation; they demarcate the area  over  which the appropriate legislatures can operate." (emphasis added)     In Union of India v.H.S. Dhillion, [1972] 2 SCR 33 at p. 52 Sikri, C.J. speaking per majority of Seven Judges’  Bench held  that  it must be remembered that the function  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 50 of 53  

lists  is  not to confer powers; they merely  demarcate  the legislative field. The Constitution Bench followed the ratio in Releigh Investment case, etc. (emphasis supplied)     16. Thus I hold that the Parliament and the  legislature of   a   State  derive  their  power  to  legislate   on   a subject/subjects in Lists 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  respective lists  merely  demarcate  the legislative  field or legislative heads. The Parliament  and the  legislature of a State have concurrent power to  legis- late upon any subject/subjects in the Concurrent list III of Seventh Schedule to the Constitution. Art. 254(1) and provi- so  to  Art. 254(2) give paramouncy to the law made  by  the Parliament,  whether  existing or made  afresh  or  amended, modified, added or repealing the law subsequent in point  of time  to the state law made under Art. 254(2). The  exercise of  the  power by a state legislature to make  impugned  law under  one  entry  or other in the concurrent  list  is  not decisive.  The concerned entry or entries is not the  source of power to make impugned law.     17. Keeping the principles laid hereinbefore at the back of our mind, let us consider the impugned provision. Section 14  read  with  s. 20 of the Acquisition Act  (21  of  1976) freezed  the  right of a citizen to apply for an  to  obtain permit or special permit to run a contract car- 683 riage in terms of the permit and monopoly to run a  contract carriage was conferred on the S.T.U., Karnataka. But the Act 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 and 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 rejected if the permit applied for relate to an approved  or notified route. The Act accords the right, while the  Acqui- sition 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 of the Act. Thus, the existence of two sets of provisions in  the  Act 59 of 1988 and Acquisition Act 21  of  1976  is sufficient to produce conflicting results in their operation in  the same occupied field. 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 of 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 (21 of 1976) to make or invite an appli- cation and injunction 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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 51 of 53  

   18. For the applicability of the principle that  special law prevails over the general law, the special law must be a valid  law in operation. Voidity of law obliterates it  from the statute from its very inception. In view of the  finding that  ss. 14(1) and 20(3) are void the contention  that  the special  law prevails over the general law is  without  sub- stance. In Justiniano Augusto De Peidada Barreto v.  Antonia Vicento  De Fonseca & Ors., [1979] 3 SCR 494 s. 5(1) of  the Goa, Daman and Diu (Administration) Act, 1962 declared  that all  laws in force immediately before December 20,  1961  in Goa,  Daman and Diu or in part thereof shall continue to  be in  force therein until amended or repealed by  a  competent Legislature  or other competent authority. Pursuant  to  the powers conferred by Art. 240 of the Constitution, the Presi- dent pro- 684 mulgated Goa, Daman and Diu (Laws) Regulations from time  to time. These regulations were extended with specified modifi- cation to Goa, Daman and Diu like Civil Procedure Code, 1908 and the Arbitration Act, 1940, but the Limitation Act,  1908 was  not extended by any regulation made by  the  President. The Portuguese Civil Code inter alia provides limitation  to lay suits which is different from the periods prescribed  in Limitation  Act 1963. It was contended that  the  Portuguese Civil Code is void by operation of Art. 254 of the Constitu- tion. While considering this question this Court at page 500 has stated thus:     "We  are not here concerned with the provisions  of  cl. (2). For the purpose of the present appeals, we will  assume that  the Portuguese Civil Code which was continued by  Par- liament to be in force in Goa, Daman and Diu was a law  made by  the State, though there may be several objections to  so doing  ....  Without doubt the provisions of the  Portuguese Civil Code, unless they are saved by s. 29(2) of the Limita- tion Act, are repugnant to the provisions of the  Portuguese Civil Code are saved by s. 29(2) then there can be no  ques- tion  of any repugnancy. So the question whether the  provi- sions  of Portuguese Civil Code are void on the ground  that they  are repugnant to the provisions of the Limitation  Act depends on the question whether the Portuguese Civil Code is saved by s. 29(2) of the Limitation Act, 1963." After exhaustive consideration of that question it was  held by  Chinnappa Reddy, J. speaking for a bench of  two  Judges that  the provisions of the Portuguese Civil Code deal  with the subject of limitation of suits etc. and in force in  the Union  Territory of Goa, Daman and Diu only is  ’local  law’ within  the  meaning of s. 29(2) of the Limitation  Act  and they  have to read into the Limitation Act 1963, as  if  the schedule  to the Limitation Act is amended mutatis  mutandis Thus,  it  is clear that the question of repugnancy  in  cl. (2)of’Art.  245  did not arise in that case.  On  the  other hand,  operation  of Portuguese Civil Code was saved  by  s. 29(2) of the Limitation Act as a local law.     20.  The doctrine of predominant purpose of  Acquisition Act  (21 of 1976) as discussed by my learned brothers is  to achieve the objective of preventing the flagrant and blatant misuse or abuse of the contract carriages as stage carriages by eliminating that class of private pliers from all  Karna- taka  roads  I  am in complete agreement with it.  It  is  a laudable  object to subserve public purpose. But the  opera- tion  of its incidental or ancillary provisions, i.e.  Arts. 14(1) and 20(3) to the 685 primary   or   predominant   purpose  is   nailed   by   the altered/situation, viz., making the law under the Act 59  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 52 of 53  

1988.  It  is  already held that Art. 254  applies  only  to repugnancy  arising between an existing or subsequent  Union law and State law on any one or more subjects in the Concur- rent  List III of Seventh Schedule to the Constitution.  The inconsistency  arising between laws on the other two  Lists, i.e.  Lists I and II, of Seventh Schedule to  the  Constitu- tion,  has  been taken care of by the opening  non  obstenti clause  of Art. 246(1) of the Constitution which  gives  Su- premacy  of List I over List II/Laws made by  Parliament  in its  residuary  jurisdiction will be governed  by  the  same provision  because Art. 248 is to be read with Entry  97  of List I. Same is the position under Art. 252 of the Constitu- tion. Once Parliament has made a law under that Article on a matter  in State List, the Legislatures of those  States  on whose  resolution the law was passed by Parliament or  which subsequently  adopt it ceases to have a power to make a  law relating  to that matter, and, therefore, there is no  ques- tion of retaining any legislative competence to make law  on that  matter. Same should De the position under Art. 253  of the Constitution. The position under temporary measures are, therefor dealt with by Art. 251 that in case of inconsisten- cy between the Union and State law, the former shall prevail and the latter will be only ’inoperative’ but not ’null  and void’.  Under  Arts. 252 and 253, the  loss  of  legislative power of the States is complete and, thereafter, the  States can no longer make any law on a subject on which  Parliament has  made a law and, therefore, their existing laws and  any laws  that they may venture to make in future will  be  null and void and for that matter Art. 254(1) cannot be  invoked. But  that  is  not the case with matter  enumerated  in  the Concurrent List. The State Legislature did not surrenderated power  or jurisdiction. The Parliament, with a view  to  lay down  general  principles 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).  If  the Parliament  expressly repeals the repugnant law  made  under Art. 254(2) different considerations may arise for which  no final pronouncement is needed here. It is already found that ss.  14(1)  and 20(3) of the Acquisition Act  (21  of  1976) became void. But 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 Though, there is opposite school of juristic thought, in  my considered  view the interpretation I have but up will  sub- serve the animation of the rounding fathers of the Constitu- tion;  the Constitutional Scheme and purpose  envisioned  by Art. 254. Therefore, after the Act has come into force,  the State legislature has its reserve power under Art. 254(2) 686 to make law. 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.  It is, therefore, made clear that this order does  not preclude the Karnataka State Legislature 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.  The authorities have misconstrued the effect  of the Act.     21.  Accordingly I hold that s. 14(1) to the  extent  of prohibiting  to make fresh application for grant of  permits to  run  the contract carriages other  than  those  acquired

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 53 of 53  

under  Act 21 of 1976 (Acquisition 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 hereby, declared to be void.     22. The writ petitions are accordingly allowed, but,  in the circumstances, without costs. P.S.S.                                             Petitions dismissed. 687