Source: Supreme Court 

Why in News? 

A bench of Justice Vikram Nath and Justice PB Varale held that that new Act that repeals the old Act does not require the assent of the President. 

• The Supreme Court held this in the case of M/S SRS Travels by it’s Proprietor KT Rajashekhar v. The Karnataka State Road Transport Corporation Workers & Ors (2025). 

What was the Background of M/S SRS Travels by it’s Proprietor KT Rajashekhar v. The Karnataka State Road Transport Corporation Workers & Ors. Case?   

• The Karnataka Contract Carriages (Acquisition) Act, 1976 (KCCA Act) was enacted to acquire privately operated contract carriages, bring them under public control, and transfer them to State-owned Road Transport Corporations, including KSRTC. 
• The Supreme Court upheld the validity of the KCCA Act in State of Karnataka v. Ranganatha Reddy (1978) and later reaffirmed it in Vijayakumar Sharma v. State of Karnataka (1990), holding that the Act was in line with Directive Principles under Article 39(b) and (c) of the Constitution. 
• The Motor Vehicles Act, 1988 (MV Act) was later enacted, defining “Contract Carriage” and “Stage Carriage” while also establishing the State and Regional Transport Authorities (STA & RTA) with powers over transport regulation. 
• The Karnataka Motor Vehicle Rules, 1989 authorized the STA and RTA to delegate powers, including contract carriage permit issuance, to their secretaries. 
• Due to increasing demand for public transport and limitations on private carriages, the KCCA Act was repealed through the Karnataka Act No. 9 of 2003 (2003 Repeal Act) to liberalize public transport and allow private operators. 
• After the repeal, private bus operators applied for contract carriage permits, and some permits were granted by the Secretaries of the STA and RTA. 
• KSRTC and its employees challenged the 2003 Repeal Act and the delegation of permit-granting powers, arguing that repealing the KCCA Act required fresh Presidential assent and that permit issuance should remain with multi-member bodies. 
• On 17^th November 2004, a Single Judge of the Karnataka High Court ruled that the 2003 Repeal Act was unconstitutional and that Rules 55 and 56 of the KMV Rules were ultra vires as they allowed permit issuance by the Secretary instead of the statutory authority. 
• The matter was referred to a Division Bench, which on 28th March 2011, upheld the validity of the 2003 Repeal Act, ruling that the Legislature had the power to repeal the 1976 Act without fresh Presidential assent. 
• However, the Division Bench struck down the delegation of permit-granting power to the Secretary, STA/RTA, stating that such power is quasi-judicial and requires collective adjudication. 
• Aggrieved by the Division Bench’s order, multiple Special Leave Petitions (SLPs) were filed in the Supreme Court by private bus operators, the Karnataka STA, and KSRTC: 
  • Private bus operators (SLP (C) Nos. 27833-27834 of 2011) challenged the ruling that disallowed delegation of permit-granting powers but accepted the validity of the 2003 Repeal Act. 
  • Karnataka STA (SLP (C) Nos. 32499-525 of 2011) also challenged the restriction on delegation while supporting the validity of the 2003 Repeal Act. 
  • KSRTC (SLP (C) Nos. 25787-956 of 2012) contested the ruling upholding the 2003 Repeal Act, seeking its invalidation, but agreed that the Secretary, STA/RTA, should not have permit-granting powers.

What were the Court’s Observations? 

• KSRTC argued that repealing the KCCA Act was unconstitutional because it allegedly overruled the Supreme Court’s decisions in Ranganatha Reddy v. Ranganatha Reddy (1978) and Vijayakumar Sharma v. State of Karnataka (1990). 
• The Court rejected this argument, stating that Supreme Court rulings only affirmed the validity of the KCCA Act at the time of enactment and did not prevent the Legislature from later modifying or repealing it in response to policy changes. 
• The Court held that fresh Presidential assent was not required for the repeal because a repeal statute does not create a new legal framework but merely nullifies the provisions of the old law. 
• The repeal was enacted under Entry 57 of List II (Taxation), where the State has independent legislative competence, while the original KCCA Act was enacted under Entry 42 (Acquisition and Requisition of Property). 
• The repeal was a policy decision aimed at creating a more flexible transport system, rather than an attempt to override judicial rulings on the KCCA Act. 
• The Court concluded that Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repealed the KCCA Act, was constitutional. 
• KSRTC failed to prove any legislative defect in the repeal, and the Court upheld the State Legislature’s power to repeal the KCCA Act.

What are the Legislative Powers of the Parliament and the State Legislature? 

• Article 246 of the COI is found under the heading ‘Distribution of legislative Powers’ in the Constitution. 
• It enunciates the subject matters on which the Legislative Assemblies and the Parliament have power to make laws. 
• Article 246 (1) provides that notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”). This would include entries like defence, foreign affairs, railways, banking etc. 
• Article 246 (2) provides that notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”). 
  • The Concurrent list serves as a tool to loosen the excessive rigidity of two-fold distribution. 
  • As per the report of the Sarkaria Commission concurrent list subjects are neither exclusively of national concern or of local concern and hence occupy a constitutional grey area. 
• Article 246 (3) provides that subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the “State List”). 
• Thus, the seventh Schedule provides for three lists that enumerate the subject matters on which the Parliament or the State Legislature has power to make laws.