Case: Vijay Kumar Sharma Vs. State of Karnataka

Ranganath Misra, J. (Majority View) 1. I have the benefit of reading the judgment prepared by my esteemed brethren Sawant and K. Ramaswaray, JJ. Brother Sawant has taken the view that Section 20 of the Karnataka Act has not become void with the enforcement of the Motor Vehicles Act, 1988, while Brother K. Ramaswamy has come to the contrary conclusion. Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments. I have found additional reasons to support the conclusion of Sawant, J., I proceed to indicate the same in my separate judgment. 2. 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. 3. Motor Vehicles Act (4 of 1939) made provision for grant of contract carriage permits. The Karnataka Contract Carriages (Acquisition) Act (Karnataka Act, 21 of 1976) received assent of the President on 11 th 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 carriages 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 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 Constitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4." 4. Under Section 4 contract carriages owned or operated by contract carriage operators along with the respective permits 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 ending proceedings in relation to grant or renewal abated. Consequential provisions were made in Sections 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. 5. The vires of the Act was the subjectmatter of the decision of this Court in a group of appeals in the case of the State of Karnataka v. Ranganatha Reddy (1978) 1 SCR 641. A Seven-Judge Bench upheld the validity of the statute holding that the impugned statute was an acquisition Act within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution. The Court took note of the fact that even though it may have had some incidental impact on inter-State trade or commerce it did not suffer from any lacuna on that count. Since the Act had been reserved for Presidential assent, to the extent Section 20 made provisions contrary to those in the Motor Vehicles Act of 1939, was taken to be valid under Article 254(2) of the Constitution. 6. The Motor Vehicles Act (59 of 1988) being a Parliamentary legislation was brought into force with effect from 1-7-1989. Under Section 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. 7. The 1988 Act has admittedly liberalised the provisions relating to grant of permits of every class including contract carriages. Sections 73, 74 and 80 contain the relevant provisions in this regard, While Section 73 provides for an application for such permit, Section 74 contains the procedure for the consideration of the grant and Section 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 Section 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 Article 254 of the Constitution, Section 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 provisions of the 1988 Act. 8. 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 Article 253 of the Constitution. The State Act continues to hold the field and the transport authorities had rightly refused to entertain the petitioners applications. 9. The question for consideration is whether Article 254(1) of the Constitution applies to the situation in hand and whether Section 20 of the Karnataka Act being inconsistent with the provisions of Sections 73, 74 and 80 of the 1988 Motor Vehicles Act became void. It would be convenient to extract the provisions of Article 254 of the Constitution at this stage and recount the background in which such provision was warranted. 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 rationalisation 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 Article 254 to meet the difficulties experienced in the intervening years. The Article reads thus : "254.(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a 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 Parliament or an existing law 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 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." 10. Though for some time there was difference of judicial opinion as to in what situation Article 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. (1973) 2 SCR 1073 and Kerala State Electricity Board v. Indian Aluminium Company (1976) 1 SCR 552 . 11. This Court in Deep Chand v. State of Uttar Pradesh (1959) 2 Suppl. SCR 8, T. Barai v. Henry an Hoe and Anr. (1983) 1 SCR 905 and Hoechst Pharmaceuticals Ld. v. State of Bihar(I983) 3 SCR 130 have laid down that clause (1) of Article 254 lays down the general rule and clause (2). is an exception thereto; the proviso qualifies the exception. Therefore, while interpreting Article 254 this position has to be kept in view. The situation of the 1939 Motor Veles 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 clause (2) of the Article. That is how the State Act had overriding effect. 12. The consideration of the present question has to be within the ambit of clause (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 Parliamentary legislation has to prevail and the law made by the State Legislature to the extent of repugnancy becomes void. 13. In clause (1) of Article 254it 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 matters of legislation. 14. The language of clause (2) is also similar though applicable in a different situation. Apparently in one sense both the clauses operate on a similar level though in dissimilar context. In clause (2) what is relevant is the words., with respect to that matter. A Constitution Bench of this Court in Zaverbhai Amaidas v. State of Bombay (1955) 1 SCR 799 emphasised that aspect. Venkatarama Ayyar, J. pointed out (at p. 757 of AIR): "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 legislation but with other and distinct matters though of a cognate and allied character, then Article 254(2) will have no application 15. A lot of light relevant to the aspect under consideration is available from another decision of a Constitution Bench of this Court: (M. Karunanidhi v. Union of India (1979) 3 SCR 254. at p. 263 of the Reports, it has been said : "It would be seen that so far as clause (1) of Article 254 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 Parliament and the State Legislatures. First, regarding the matters contained in List I i.e., the Union list to the Seventh 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 conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances: 1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully 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) of 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 constitutionally y 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 falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential. 4. Where, however, a law made by the State Legislature on a Subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254." 16. 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. 17. It has already been stated that the State Act intended to eliminate private operators from the State in regard to contract carriages acquired under the existing permits, vehicle and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in Section 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 Section 73 or Section 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 provision in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in Section 20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision. 18. 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 field. Since Sections 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 Article 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. 19. 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. 20. 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 Clause (1) of Article 254 of the Constitution. 21. The writ petitions fail and are dismissed. 22. Sawant, J (Majority view) :- 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). 23. The petitioners claim a declaration that the provisions of Sections 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 respondents Nos. 2 and 3, namely the Karnataka State Transport Authority and the Karnataka Regional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sections 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. 24. 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 furtherence 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 interest, 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 declaration 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 Constitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4." 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, all rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, instruments, 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 documents of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose. Section 6 provided for payment of compensation for the acquisition of all the said property. Since the avowed object of the Act was two-fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy underlying 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 individuals, 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 Karnataka v. Ranganatha Reddy (1978) 1 SCC 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 service 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 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 pattern of society as the national objective required that public utility services should be in the public sector. The acquisition of road transport undertakings by the State, therefore, undoubtedly served the public purpose. 25. 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 individuals and to reserve them exclusively to the State undertaking 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 regulate 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 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 special provisions relating to State Transport Undertakings in Chapter IV-A, of the Motor Vehicles Act, 1939 which was in operation when the Karnataka Act was brought into force. The very fact that instead the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legislature in enacting it was materially different. This is also obvious from the various provisions of the enactment pointed out above. 26. 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 rationalise 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 licences 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 of vehicles also by the authorised testing stations; f) enabling provision for updating the system of registration 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) to (1) ................." 27. The special provisions relating to the State Transport 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. M V 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 permits under both the old and the new Acts 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. 28. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karnataka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Article 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. 29. Shri Nariman, the learned counsel for the petitioners, however, contended that the provisions of Sections 14 and 20 of the Karnataka Act were in direct conflict with the provisions 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 Sections 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from entertaining 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 Sections 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 Constitution. 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 in spite 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 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 v. Ranganatha Reddy (supra) while repelling the contention that there was a legislative encroachment by the Karnataka Act because it impugned on the subject of Inter-State Trade and 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 Inter-State 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 sittizited in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental encroachment on the topic of inter State trade and commerce, even assurnring there is some, cannot invalidate the Act. The MV Act 1939 was enacted under Entry 20 of List III of Schedule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution. The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any between the Act and the Motor Vehicles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List III deals with acquisition of property. The state has enacted the Act mainly tirlder 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 MV Act 1939) that Chapter VI relating to the special provisions about the State Transport 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 Government 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. 30. It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitution, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legislation 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 v. Allahrakhiya, AIR 1942 FC 27 and the other of the Privy Council reported in AIR 1947 PC 722 (or AIR 1947 PC 60 -Ed.) 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 Government of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise. In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code. The Court held that there was no repugnancy between the legislations. But while holding so, the Court made a one sentence observation as follows : "In the judgment of the High Court here is some discussion of the question of the "pith and substance" of the Act; but that question does not arise as objection is taken not under Section 100 of the Constitution Act but under Section 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 covered 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 Contract Act and the Civil Procedure Code cud 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 observation in the judgment either confirming, or dissenting from, the said observations. This being the case the said observations cannot be regarded as more than general in nature. They are not even an obiter dicta much less are they the ratio decided 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 on a subject exclusively reserved for the other. When the legislative encroachment 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 constitutionally 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 List, 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 between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinising the same by the same touchstone. What is to be ascertained in each case is whether the legislations are on the same subject 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. 31. I may in this connection refer to some of the authorities relied upon by the parties. In Municipal Council Palai v. T. J. Joseph (1964) 2 SCR 87 , this Court had to consider the respugnancy between the resolution passed by the appellant Municipal Council in exercise of the powers vested in it under Sections 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. 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 legisiations 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 construction, the Court there had said that when the legislation 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 earlier 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 earlier 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 statute till the new authority chose to exercise the powers conferred 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 presumption 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 add 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 repugnancy between the two provisions of the old and the new statutes that they cannot be reconciled and made to stand together. In other words they must he 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 uoted by Crawford "Statutory Construction" 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 subject, it is but reasonable to conclude that the Legislature, in 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 treating the subject in a general manner, and not expressly contradicting the original Act, shall not be considered as intended to effect the more particular or positive 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 legislature 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 applicable 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 Daws 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 provisions 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 Deepchand v. State of U.P.,(1959) 2 Supp 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 provisions; 2. Whether the legislature intended to lay down an exhaustive code in respect of the subject matter replacing the earlier law; 3. Whether the two laws occupy the same field. The Court referred to Sutherland on Statutory Construction (Vol. 1 3rd Edri. p. 486) on the question of "repeal of special and local statutes by general statutes". The paragraph 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 qualification 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 all 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 Staturoty Construction. The Court also approved of the observations of Suleman, J., in Shyamakant Lal v. Rambliajan 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 Section 72 of the Travancore Cochin Motor Vehicles Act were intended to apply to a much wider area than those of Sections 286 and 287 of the Travancore District Municipalities Act it cannot be sald that Section 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 Section 72 of the Travancore-Cochin Motor Vehicles Act as a provision in continuity with Sections 286 and 287 of the Travancore District Municipalities Act so that it could be availed of by the appropriate authority as and when it chose. In other words the 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 appropriate authority may nevertheless take action under Section 72 of the Travancore Cochin Motor Vehicles Act, the result of which would be to override the action taken by the Municipal Council under Section 287 of the District Municipalities Act. No action under Section 72 has so far been. taken by the Government and, therefore, the resolutions of the Municipal Counsel still hold good. Upon this view it is not necessary to consider certain other points raised by learnea counsel." It would thus appear from this decision that the Court held there that the allegedly conflicting provision of Travancore Cochin Motor Vehicles Act were intended to apply to much wider area than the relevant provisions of the Distt. Municipalities Act and, there fore, 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 continuity 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 Vehicles 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 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 SCC 537 , the conflict was between the provisions of Section 80 of the Railways Act 1890 as amended. by the Railway (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 Presidency Small Cause Courts Act 1882, on the other. Section 80 of the Railways Act before its amendment has provided that a suit for compensation for loss of life or injury to a passenger or for loss, destruction and deterioration of animals or goods, would lie where the passengers or the animals or goods were booked through over the Railways of two or more Railway Admininist rations, 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 maintainable - (a) if the passenger or the aidinals or goods were booked from one suition to another on the railway of the same Railway Administration, against that Railway Administration, (b) if they were booked through over the railways 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 futher provided 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 claim 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 be 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 Presidency Small Cause 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 question m as concerned. Confirming the High Courts view, the Court held that the new Section 80 prevailed over the provisions of Section 20 of the Code of Civil Procedure and of Section 18 of the Presidency Small Cause Courts Act. The Court took the view that in view of the fact that the provisions of the new Section 80 as well as the relevant provisions of the Code of Civil Procedure and the Presidency Small Cause 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 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 Cause Courts Act by necessary implication. The Court also held that since the provisions of the latter two general 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 like the Code of Civil Procedure and general provisions of Section 20 of the Code and Section 18 of the Presidency Small Cause Courts Act. It will thus be apparent that in that case the provisions 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 nationalisation of the road transport within local territorial limits. The later provisions are general in nature and in furtherance of the object of the Act which is to regulate transport. The subject matters of both the statutes and the two sets of provisions are, therefore, materially different. In our case both the statutes can stand together. The legislative intent is clear. Since, further, the Parliament had enacted the later 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 v. State of U.P., 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 and 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 repugnancy under Article 254 of the Constitution can arise where Parliamentary legislating 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 and the State Legislature in legislating under an Entry in the Concurrent List exercised their powers over the same subject matter on whether the laws enacted by Parliament were intended to the exhaustive so as to cover the entire field. The Court then referred to three tests of inconsistency on repugnancy listed by Nicholas on p. 303 (2nd Edn.) of his Australian Constitution. namely, (1) there may he inconsistency 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 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 "dont", 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 "dont" but in different ways. For example, one law may say, "No person shall sell liquor by retail, that is, in quantities of less than five gallons at a time" and another law may say, "No person shall sell liquor by retail, the 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 repungnant, 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 hour case (1926) 37 CLIZ 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 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 Sulailaman, J. in Shyamakant Lal v. Rarnbhajan Singh (supra) on the subject which are as follows: "When the question is whether a Provincial legislation is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repugnant 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 much exists 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). 32. 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 (Development and Regulation) Act, 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 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 exercise 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 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 prerequisite before any .repugnancy could ever arise. 33. 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 legislation under Entry 33 of List III. That, however, did not affect the legislative competence of the U.P. State Legislature 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 Government) 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 provisions in the two legislations were, therefore, mutually exclusive and did not impings upon each other. By referring to the provisions of Central Government Sugar Cane Control Order 1955 and the U. P. Government Sugar Cane (Regulation and Purchase). Order 1954 issued under the respective statutes, the Court pointed out that none of those provisions also overlapped. The Central 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 Central. There was no repugnancy whatever between those provisions, and neither the State Act nor the rules framed thereunder as well as the State Governments Order issued under it trenched upon the field covered by the Essential Commodities Act. The Court therefore held that since there was no repugnance between the two, the provisions of Article 254(2) of the Constitution did not come into play. The Court then considered whether the repealing Section 16 of the Essential Commodities 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) xxx xxx xxx xxx (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 by 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 comniondity 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 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 vacuum. 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 Parliament and with the consent of the President. It is only such a law that could, be altered, a mended 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 contain in 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 Sugarcane Control Order, 1955 must, in this view, be held to be invalid. (sic). 34. 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 deter mining 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 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 legislation to give effect to its dominant purpose may incidentally be on the same subject as covered by the provision of the other legislation. But such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intended to be covered by Article 254(2). Both the legislations must be substantially on the same subject to attract the Article.

Decision reasoning: 0[ds]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 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 legislations25. 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 individuals and to reserve them exclusively to the State undertaking 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 regulate 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 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 special provisions relating to State Transport Undertakings in Chapter IV-A, ofthe 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 Legislature in enacting it was materially different. This is also obvious from the various provisions of the enactment pointed out above26. 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 rationalise 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 licences 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 of vehicles also by the authorised testing stations;f) enabling provision for updating the system of registration 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) to (1) ................."27. The special provisions relating to the State Transport 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 ActIt is also not correct to say that the new Act, i.e. M V 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 permits under both the old and the new Acts 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 Act28. Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters. As stated earlier the Karnataka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Article 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 legislations29. Shri Nariman, the learned counsel for the petitioners, however, contended that the provisions of Sections 14 and 20 of the Karnataka Act were in direct conflict with the provisions 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 Sections 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from entertaining 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 Sections 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 ConstitutionThis 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 in spite 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 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. In the case of State of Karnataka v. Ranganatha Reddy (supra) while repelling the contention that there was a legislative encroachment by the Karnataka Act because it impugned on the subject of Inter-State Trade and 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 Inter-State 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 sittizited in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental encroachment on the topic of inter State trade and commerce, even assurnring there is some, cannot invalidate the Act. The MV Act 1939 was enacted under Entry 20 of List III of Schedule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution. The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any between the Act and the Motor Vehicles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List III deals with acquisition of property. The state has enacted the Act mainly tirlder this entry......."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 notI 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 MV Act 1939) that Chapter VI relating to the special provisions about the State Transport 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 Government 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 Acts30. It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitution, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legislation 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 v. Allahrakhiya, AIR 1942 FC 27 and the other of the Privy Council reported in AIR 1947 PC 722 (or AIR 1947 PC 60 -Ed.) confirming the formerThe 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 Government of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise. In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code. The Court held that there was no repugnancy between the legislations. But while holding so, the Court made a one sentence observation as follows : "In the judgment of the High Court here is some discussion of the question of the "pith and substance" of the Act; but that question does not arise as objection is taken not under Section 100 of the Constitution Act but under Section 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 covered 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 Contract Act and the Civil Procedure Code cud 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 observation in the judgment either confirming, or dissenting from, the said observations. This being the case the said observations cannot be regarded as more than general in nature. They are not even an obiter dicta much less are they the ratio decided of the case. Hence the said observations do not have a binding effectEven 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 on a subject exclusively reserved for the other. When the legislative encroachment 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 constitutionally 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 List, 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 between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinising the same by the same touchstone. What is to be ascertained in each case is whether the legislations are on the same subject 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 different31. I may in this connection refer to some of the authorities relied upon by the parties. In Municipal Council Palai v. T. J. Joseph (1964) 2 SCR 87 , this Court had to consider the respugnancy between the resolution passed by the appellant Municipal Council in exercise of the powers vested in it under Sections 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 limitsThe 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 legisiations 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 construction, the Court there had said that when the legislation 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 earlier 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 earlier 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 statute till the new authority chose to exercise the powers conferred 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 statuteReferring to the case ofGoodwin v. Phillips, (1908) 7 CLR 16the 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 presumption 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 add a repealing clause indicates that the intent was not to repeal existing legislationWhat 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 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 legislationsThe contention was that the expression "any other law" covered by 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 comniondity 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 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 vacuum. 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 Parliament and with the consent of the President. It is only such a law that could, be altered, a mended 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 contain in 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 Sugarcane Control Order, 1955 must, in this view, be held to be invalid. (sic)34. 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 deter mining 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 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 legislation to give effect to its dominant purpose may incidentally be on the same subject as covered by the provision of the other legislation. But such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intended to be covered by Article 254(2). Both the legislations must be substantially on the same subject to attract the Article35. 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