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

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

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

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

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 Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003 (2003 Repeal Act) repealed the 1976 Act, allowing the delegation to issue permits to the Secretary of STA ensuring private operators greater participation in the transport sector.

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

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

Issues

The following issues arose for the Court's determination:

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

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