State Transport Authority Can Delegate Its Functions U/S 68(5) MV Act: SC Upholds Repeal Of Karnataka Contract Carriages (Acquisition) Act
The Supreme Court was deciding Civil Appeals of the Private Bus Operators and Karnataka State Road Transport Authority.
The Supreme Court held that the State Transport Authority (STA) can delegate its functions under Section 68(5) of the Motor Vehicles Act, 1988 (MV Act) and Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003 is constitutional.
The Court held thus in a batch of Criminal Appeals preferred by the Private Bus Operators and Karnataka State Road Transport Authority against the Judgment of the Karnataka High Court.
The two-Judge Bench comprising Justice Vikram Nath and Justice Prasanna B. Varale observed, “Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repeals the Karnataka Contract Carriages (Acquisition) Act, 1976 is constitutional. … The State Transport Authority (STA) possesses the power to delegate its functions under Section 68(5) of the MV Act, as expressly provided by the statute and further clarified by Rule 56(1)(d) of the KMV Rules.”
The Bench held that the power of the STA to delegate the issuance of contract carriage, special, tourist, and temporary permits to its Secretary is fully supported by the statutory provisions of Section 68(5) of the MV Act, and Rule 56(1)(d) of the Karnataka Motor Vehicle Rules, 1989 (KMV Rules).
Senior Advocate Devadatt Kamat appeared on behalf of the Appellants while Senior Advocate Kiran Suri appeared on behalf of the Respondents.
Brief Facts
The Karnataka Contract Carriages (Acquisition) Act, 1976 (KCCA Act) was enacted with the objective of acquiring privately operated contract carriages to curb their alleged detrimental operation in the State and to bring them under public control. This Act was challenged but upheld by the Apex Court in the case of State of Karnataka v. Ranganatha Reddy (1978) and later reaffirmed in Vijayakumar Sharma v. State of Karnataka (1990). In 1988, the MV Act was enacted and in 1989, the KMV Rules were enacted. In the subsequent decades, transport policy in Karnataka underwent shifts due to rising demand for public transport services, rapid urbanization, and the perceived inability of government-run corporations alone to meet commuter needs. Thereafter, in 2003, the Amendment Act was enacted. Before the Karnataka High Court, the Karnataka State Road Transport Corporation (KSRTC) and its employees’ federation filed various Writ Petitions challenging the validity of the 2003 Repeal Act and the power of the Secretaries to grant permits.
The Single Judge held that Rules 55 and 56 of the KMV Rules are null and void as ultra vires the MV Act and that the delegation of power to issue contract carriage and stage carriage permits as well as to perform the functions of STA/RTA to the Secretary is not permissible. Thereafter, the Single Judge ruled that the repeal of the KCCA Act is unconstitutional. Subsequently, the Division Bench consolidated multiple challenges to the 2003 Repeal Act, as well as the dispute about whether the Secretary, STA could lawfully grant permits. The Division Bench upheld the constitutional validity of repealing the 1976 Act but rejected the argument that the STA/RTA could delegate contract carriage permit issuance to the Secretary. Being aggrieved, the Appellants approached the Apex Court.
Reasoning
The Supreme Court in the above regard, noted, “… the rationale underlying the 2003 Repeal Act is sound and consistent with the principles of legislative power. The arguments advanced by the Respondent Corporation, that the repeal would amount to an impermissible overruling of prior Supreme Court decisions, that it violates the requirement of presidential assent, or that it is otherwise beyond the legislative competence of the State, are untenable.”
The Court added that the legislative intent, as clearly articulated in the 2003 Repeal Act, was to improve public transport services and to rectify the shortcomings of the earlier regulatory regime.
“… Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repeals the KCCA Act, is constitutional. The KSRTC challenging the repeal on these grounds have failed to establish any defect in the exercise of the Legislature’s power”, it held.
The Court further said that the State Legislature has rightly exercised its power to repeal the Act.
“The delegation is a rational and necessary administrative measure that facilitates prompt and efficient processing of permit applications without undermining the oversight function of the STA. Consequently, we reject the Respondents’ arguments and hold that the High Court’s reasoning on the non delegability of permit-granting power is flawed”, it observed.
The Court also said that the power to delegate, as provided by law, remains intact, and any decision to the contrary is unsustainable in light of both legislative intent and practical necessity.
“The impugned orders of the High Court that denied the delegation power of the STA are set aside, and it is confirmed that the Secretary of the STA is empowered to grant non-stage carriage permits (including contract carriage, special, tourist, and temporary permits) in accordance with Section 68(5) of the MV Act and Rule 56(1)(d) of the KMV Rules, subject to the limitations and conditions prescribed therein”, it concluded.
The Court, therefore, directed the appropriate authorities to take all necessary measures to implement its findings and ensure that the delegation of permit granting power is exercised in a manner consistent with the statutory provisions and the objectives of efficient public transport administration.
Accordingly, the Apex Court dismissed the Appeals of KSRTC and allowed that of the private bus operators and Karnataka State Road Transport Authority.
Cause Title- M/s. S.R.S. Travels v. The Karnataka State Road Transport Corporation Workers & Ors. (Neutral Citation: 2025 INSC 152)
