The court upheld the constitutionality of the 2003 Repeal Act and affirmed the STA's authority to delegate permit-granting powers to its Secretary, distinguishing between quasi-judicial and administrative functions.

JUDGMENT :

VIKRAM NATH, J.

1. Delay, if any, is condoned.

2. Leave granted.

3. These appeals arise out of the common judgment and order dated 28.03.2011 of the High Court of Karnataka in W.A. No. 5466 of 2004 and connected matters. In view of the multiple appeals that have been filed, there is a need to clarify the array of parties in the respective SLPs:

I. SLP (C) Nos. 27833-27834 of 2011: Filed by private bus operators.

II. SLP (C) Nos. 32499-525 of 2011: Filed by the Karnataka State Road Transport Authority (STA).

III. SLP (C) Nos. 25787-956 of 2012: Filed by the Karnataka State Road Transport Corporation (KSRTC), a corporation constituted under the Road Transport Corporations Act, 1950¹[The 1950 Act].

For clarity of reference in this judgment:

• The Private Bus Operators and the Karnataka State Road Transport Authority will be referred to collectively as “the Appellants.”

• The Karnataka State Road Transport Corporation will be referred to as “the Respondent Corporation” or “KSRTC.”

4. The facts leading to the present appeals are as follows:

4.1. Enactment of the 1976 Act (Karnataka Contract Carriages (Acquisition) Act, 1976²[The KCCA Act])- The 1976 Act was enacted with the objective of acquiring privately operated contract carriages to curb their alleged detrimental operation in the State and to bring them under public control. Under the 1976 Act, once these contract carriages were acquired, all corresponding permits as well as certificates of registration stood vested in the State Government. Subsequently, the State Government transferred these vehicles and permits to State-owned Road Transport Corporations, notably including the KSRTC.

4.2. The Act was challenged but upheld by this Court in State of Karnataka v. Ranganatha Reddy, AIR 1978 SC 215 and later reaffirmed in Vijayakumar Sharma v. State of Karnataka, AIR 1990 SC 2072. In these decisions, the Supreme Court recognized that the 1976 Act’s purpose was to further the Directive Principles of State Policy under Article 39(b) and (c) of the Constitution and did not infringe any fundamental rights or constitutional principles.

4.3. MV Act Enactment: In 1988, the Motor Vehicles Act, 1988⁵[MV Act] was enacted by the Parliament. This Act contains several provisions relevant to the present matter: Section 2(7) defines “Contract carriage” and Section 2(40) defines “Stage Carriage.” Moreover, Section 68 deals with transport authorities; in particular, Section 68(2) provides for the composition of the State Transport Authority⁶[STA] and the Regional Transport Authority⁷[RTA], mandating that each include a Chairman with judicial experience along with other members—up to four for the STA and up to two for the RTA. Section 68(3)(b) empowers the STA to perform the duties of the RTA, and Section 68(5) enables both authorities, under rules made pursuant to Section 96, to delegate their powers and functions to any other authority or person subject to prescribed restrictions.

4.4. On 1 July 1989, the Karnataka Motor Vehicle Rules, 1989⁸[KMV Rules] were enacted. Under Rules 55 and 56 of these Rules, the RTA and STA were empowered to delegate their powers to their secretaries, including the authority to grant contract carriage permits. Furthermore, on 27 February 1990, the constitutionality of the KCCA Act was challenged on the ground of repugnancy. In Vijay Kumar Sharma v. State of Karnataka, (1990) 2 SCC 562, this Hon'ble Court upheld the constitutionality of the KCCA Act, holding that there is no inconsistency or repugnancy between the KCCA Act and the MV Act.

4.5. In the subsequent decades, transport policy in Karnataka under