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TMI Blog1990 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... ties 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: "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 ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 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." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ica- 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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- 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 effect to, then the State has progressively to assume the predominant and dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mparison 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: "(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 Preside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conferred wide powers on another authority which would include some of the powers conferred by the earlier stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Counc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailway 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n) 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 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 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 concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Parl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 terr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numerat- 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, Parliame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." In 1964, the Parliament made an amendment viz. Industri- al Disputes (Amendment) Act (36 of 1964) amending Section 7-A(3)(a) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so 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 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 rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llustrative 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; (vi) If one Act/Provision/Provisions in an Act makes lawful that which the other declares unlawful the two to that extent ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-- "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 subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et- 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- er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 carriage 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 Transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure or other competent authority. Pursuant to the powers conferred by Art. 240 of the Constitution, the Presi- dent promulgated 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 ame ..... X X X X Extracts X X X X X X X X Extracts X X X X
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