Supreme Court Upholds Karnataka Law Which Delegates Power Of Issuing Transport Permits To STA Secretary

The Supreme Court, in a key ruling regarding private motor vehicle operators in Karnataka, upheld the constitutionality of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003 (“2003 Act”) granting the power to the Secretary of the State Transport Authority(STA) to issue transport permits within the state.

The Court also upheld that the power of the STA to its Secretary to issue transport permits.

The judgment delivered by a bench of Justices Vikram Nath and Prasanna B Varale observed that the routine grant of permits should not be constricted in the hands of the State Transport Authority (“STA”), rather the delegation of routine functions for the grant of permit is permissible to reduce the load of the STA, to avoid delays.

“the practical impact of not allowing delegation would be to overload the STA with routine functions, potentially causing undue delays and inefficiencies in the permit-issuance process. Such delays could disrupt the balance of public transport service delivery, which the Legislature clearly sought to improve by liberalizing the regime for non-stage carriage permits. In this light, the delegation of routine permit-granting powers is not only legally permissible but is also necessary to meet the practical demands of an evolving transport sector.”, the court observed.

The bench heard the case where the 2003 Act enabled the Secretary of the State Transport Authority (STA) to issue permits for contract carriages, special vehicles, tourist vehicles, and temporary vehicles. Previously, the 1976 Karnataka Contract Carriages (Acquisition) Act (“KCCA”) had restricted this authority to the STA, but that law was repealed by the 2003 Act upholding the delegation of authority from STA to its Secretary to issue such permits.

Briefly put, the Karnataka Contract Carriages (Acquisition) Act, 1976, was enacted to acquire private contract carriages and bring them under state control. The Act was upheld by the Supreme Court in previous judgments. Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003 (2003 Repeal Act) repealed the 1976 Act, allowing the delegation to issue permits to the Secretary of STA ensuring private operators greater participation in the transport sector.

The Karnataka High Court had struck down the delegation of permit-granting powers to the STA Secretary, declaring the 2003 Act unconstitutional. The High Court's reasoning was that, while the 1976 Act had been submitted for presidential consideration, the 2003 Act had not.

Following this, a private operator appealed to the Supreme Court.

Issues

The following issues arose for the Court's determination:

1. Whether the 2003 Repeal Act repealing the KCCA Act is constitutionally valid, particularly given that the 1976 Act had earlier been upheld by the Supreme Court.

2. Whether the power to grant contract carriage permits can be delegated to the Secretary of the State Transport Authority (STA).

Court Upholds Constitutionality Of 2003 Repeal Act

The Court held that when the State Legislature had the plenary power to enact the law, then it also had the power to repeal the law, justifying the repeal of 1976 Act. Since the repeal of 1976 Act was a policy decision intended to liberalize the transport sector and address the shortage of public transport services, the Court noted that no fresh Presidential assent was required for repealing the 1976 Act as it did not contradict prior judicial rulings but reflected a legislative policy shift.

Rejecting the Respondent's argument regarding the requirement of presidential assent for repealing the 1976 Act, the Court observed:

“Moreover, the argument that the repeal should have required fresh presidential assent is misplaced. A repeal statute does not recreate the legal framework anew but rather extinguishes the earlier Act's operative provisions; it is not subject to the same procedural requirements as an original enactment when it comes to the need for fresh assent, provided that the repeal falls within the legislative competence of the State.”

“the rationale underlying the 2003 Repeal Act is sound and consistent with the principles of legislative power. The arguments advanced by the Respondent Corporation, that the repeal would amount to an impermissible overruling of prior Supreme Court decisions, that it violates the requirement of presidential assent, or that it is otherwise beyond the legislative competence of the State, are untenable. The legislative intent, as clearly articulated in the 2003 Repeal Act, was to improve public transport services and to rectify the shortcomings of the earlier regulatory regime. Accordingly, we hold that Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repeals the KCCA Act, is constitutional. The KSRTC challenging the repeal on these grounds have failed to establish any defect in the exercise of the Legislature's power.”, the court added.

Delegation of Permit-Granting Authority To Secretary of STA Justified

The Court rejected the Respondent's argument that the delegation of permit granting authority to a Secretary undermines the process because permit-granting requires a multi-member body due to its quasi-judicial nature which cannot be performed by Single Member Body i.e., Secretary.

The Court said even though the permit granting authority is a quasi-judicial function, there's no bar under the administrative law to delegate the quasi-judicial function if the enabling statute expressly provides for such delegation.

“Here, Section 68(5) of the MV Act, coupled with the specific language of Rule 56(1)(d) of the KMV Rules makes it clear that the Legislature intended for the STA to delegate certain routine permit functions. The exclusion of stage carriage permits from this delegation does not imply that all permit functions are inherently non-delegable; rather, it reflects a calibrated approach that distinguishes between complex adjudicatory functions and routine administrative tasks.”, the court observed.

“Secondly, from a practical standpoint, the STA is entrusted with a wide range of responsibilities under the Motor Vehicles Act, and its workload necessitates delegation to ensure timely service delivery. The Secretary, being a high-ranking officer with substantial expertise in transport administration, is well equipped to handle routine permit applications. The delegation mechanism is not a blank check for arbitrary decision-making; it operates within the boundaries and conditions prescribed by the enabling rules framed under Section 96 of the MV Act. This ensures that, while administrative efficiency is achieved, there remains adequate oversight and accountability through the broader STA framework.”, the court added.

In light of the aforesaid observation, the Court allowed the appeal holding 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.”

Case Title: M/S S.R.S. TRAVELS BY ITS PROPRIETOR K.T. RAJASHEKAR VERSUS THE KARNATAKA STATE ROAD TRANSPORT CORPORATION WORKERS & ORS.

Citation : 2025 LiveLaw (SC) 166

Click here to read/download the judgment

Appearance:

Sr. Adv. Mr. Devadatt Kamat argued for the Appellants 

Sr. Adv. Ms. Kiran Suri argued for the Respondents