VIJAY KUMAR SHARMA & ORS. ETC. v. STATE OF KARNATAKA & ORS. ETC

Citation: [1990] 1 S.C.R. 614

Court: Supreme Court of India

Bench: RANGANATH MISRA, P.B. SAWANT, K. RAMASWAMY

Case summary

The premise is that the law made by the Parliament is paramount and Union and State law must relate to the same subject matter in the Concurrent List. In view of the decision of the majority the Writ Petitions stand dismissed and the rule in each is discharged with costs.

Judgment text

ORDER 15. In view of the decision of the majority the Writ Petitions stand dismissed and the rule in each is discharged with costs. K. RAMASWAMY, J. 1. Despite my deep respect to my learned brother, I express my inability to persuade myself to agree with the result proposed in th_e draft judgments of my brothers. V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J. ]653 y · The notoriety of open and uninhibited misuse of contract carriage as stage carriages in picking up and setting down ~he passengers· 1 en route the route for hire or reward sabotaging the ec. onomic, efficient and co-ordinated transport service by the respective State Transport Undertakings (for short, "the S. T. U. ") had been taken cognizance of by the Karnataka State Legislature.

It provided the remedy making the Karnataka Contract Carriages (Acquisition) Act (21 of 1976), for short, "the Acquisition Act" by taking aid of the Entry 42, List III (Concurrent List) of the Seventh Schedule to the Constitution and Articles 31, 39(b) and (c) of the Constitution. It was reserved for consideration and has received the assent of the President on March 11, 1976. It came into force with effect from March 12, 1976. Section 3(g) of the Acquisition Act defines "Contract Carriage" as one covered under s. 2(4) of the Motor Vehicles Act (4 of 1939), for short, "the Repealed Act" including public service vehicle defined under 1 ~~, s. 63(6), etc. s. 3(a) defines "acquired property"-means the vehicles and other immovable and movable property vesting in the State Government under s. 4 thereof. The Acquisition Act excluded tourist vehicles, motor cabs, etc. Section 4 de!

Cares that on and from the notified date, every contract carriage along with permit or certificate of registration or both, lands, buildings, workshop, etc. shall stand ,· ~·:;,;· vested in the State Government free from encumbrances. Section 6 provides machinery to determine the amount for the vesting of the acquired property under s. 4. Section 14 which is relevant for the purpose of this case read thus: . : "Fresh permit or renewal of the existing permit barred- Except as otherwise provided in this Act- (1) No person shall on or after the commencement of this Act apply for any permit or fresh permit or for renewal of an .

p existing permit for the running of any contract carriage in the State; and (2) every application for the grant of a permit or fresh permit or for the renewal of the existing permit and all appeals or revisions arising therefrom relating thereto made or preferred before the commencement of this Act and pending in any Court or with any Officer, Authority or Tribunal constituted under the Motor yehicles Act shall abate. " A reading thereof manifests its unequivocal declaration that on and from the date of vesting viz. , March 12, 1976, the statute prohibits any '--""person to apply for, any fresh permit or renewal of an existing permit r to run any contract carriage in that State and all applications,· appeals or revisions pending before the appropriate authority as on the notified date, statutorily declared to have been abated. Section 20 declares by employing non-obstenti clause in sub-s.

(1) that notwithstanding anything in the repealed Act with effect from March 12, 1976 all contract carriage permits granted or renewed in respect of any i vehicle other than a vehicle acquired under the Acquisition Act, or belonging to the S. T. U. , Kamataka; or referred to ins. 24 thereof t shall stand cancelled. Sub-s. (2) accords with mandatory language that the S. T. U. "shall be entitled for or renewal of contract carriage permits to the exclusion of all other persons" and sub-s. (3) prohibits by employing a negative language that "no officer or authority shall invite any application or entertain any such application of persons \ other than the Corporation (S. T. U. ) for grant of pei;mit or the running ~ of the contract carriage. " By conjoint operation of ss. 14 and 20, the right of any person other than S. T. U.

, Karnataka to apply for and to obtain any permit or renewal of an existing permit to run a motor vehicle as a contract carriage has been frozen and issued statutory injunction restraining the authority concerned from either inviting or . ,_ entertaining any application from him for the grant or renewal of ')("' ', contract carriage permit. Monopoly to obtain permit or renewal to run contract carriage was conferred on S. T. U. , Karnataka. The constitutional validity of the Acquisition Act was upheld by this Court in State of Karnataka v. Ranganatha Reddy, [1978] 1SCR641. The contention that the Acquisition Act falls under Entry 42 of List I of Seventh Schedule to the Constitution, viz. , inter-state trade and commerce and that therefore the State Legislature lacked competence to make the Acquisition Act was negatived. It was held that in pith and substance, . _,;'"~ it is an act of acquisition of the contract carriages falling in Entry 42 of ( List III.

It was further held that the effect of operation of ss. 14 and 20 is incidental or ancillary to the acquisition. Having received the assent of the President, it is saved by Art. 254(2) of the Constitution. When an attempt to obtain renewal or fresh special permits to run contract carriages taking aid of s. 62(1) ors. 63(6) respectively of the repealed Act 4 of 1939 was made on the ground that the Acquisition Act had saved their operation, this Court in Secretary, R. T. A. , Bangalore v. >- P.. D. Sharma, AIR 1989 SC 509 held that by operation of ss. 14 and 20(3), a public sei"ice vehicle be it a contract carriage or stage carriage for which temporary permits under ss. 62(1) and 63(6) were issued and were in force on January 30, 1976 are not entitled to fresh permits and exclusive monopoly to run contract carriages was given to S. T. U. , Karnataka. V. K. SHARMA v. STATE OF KARNATAKA {K. RAMASWAMY, J. ]655 / 2. The Motor Vehicles Act, 1988 (Act 59.

of 1988), for short, "the Act", came into force wiih effect from July 1, 1989. Section 2(7) defines 'contract carriage'. Section 2(8) defines 'motor vehicle' or 'vehicle' to mean any mechanically propelled vehicle adapted for use upon road whether the power of propulsion is transmitted thereto from an external or internal source and includes a chasis to which a body has not been attached and a trailer ..... Section 2(34) defines , 'public place' to mean, a road, street, way or other place whether a thoroughfare or not, to which the public have a right of access and includes any place or stand at which passengers are picked up or set down by a stage carriage. Section 2(35) defines 'public service vehicle' to mean, any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a .... . , contract carriage and stage carriage. Section 2(47) defines 'transport vehicle' to mean, a public service vehicle ..... , or a private service vehicle.

Chapter V deals with Control of Transport Vehicles, s. 66 mandates an ' owner of a motor vehicle to obtain permit to run it in accordance with the conditions of a permit thus: "(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passen- ~ gers or goods save in accordance with the conditions of permit granted or countersigned by a Regional Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used. " (Emphasis supplied) (The provisos are not necessary for the purpose of this ~ case. Hence omitted) Section 73 requires him to make an application for permit of a contract carriage with particulars specified therein. Section 74 deals with grant of contract carriage permit. Sub-s. (1) thereof provides that "subject to provisions of sub-s.

(3), a Regional Transport Authority may, on an application made to it under s. 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems ... fit or refuse to grant such a permit, provided that no such permit shall be granted in respect of any area not specified in the application. " Sub-s. (2) empowers the Regional Transport Authority to impose any one or more conditions enumerated therein to be attached to the permit, the details therof are redundant. Sub-s. (3) empowers a State Government, when directed by the Central Government, to limit the number of contract carriages generally or a specified type as may be fixed in the notification published in this behalf for their operation on the city routes. The details are also not necessary for the purpose of this case. Under s. 80(1), an application for a permit of any kind may be made at any time. Sub-s.

(2) posits that "a Regional Transport Authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under this Act. " (Emphasis Supplied). The proviso are omitted as not being relevant. The petitioners have applied under ss. 73, 74 and 80 of the Act for grant of contract carriage permits. Placing reliance on ss. 14 and 20 of the Acquisition Act, the concerned authorities have refused to entertain their applications. Calling them in question the above writ petitions have been filed under Art. 32 of the Constitution. 3. The contention of Sri Nariman, learned senior counsel for the petitioners, is that the object of the Act is to liberalise grant of contract carriages which do not ply on any particular routes. Contract carriage defined under s. 2(7) of the Act is a public service vehicle within the meaning of s. 2(35) of the Act. Section 66 obligates the owner to obtain permits to run contract carriages. Section 14(1) read with s.

80(1) accords the right to the petitioners to apply for, and enjoins the authorities under s. 80(2) to consider and to grant permits to run public service vehicles as contract carriages. Section 217(1) repealed ~ all the laws, save such of the laws which are not inconsistent with the provisions of the Act. The operation of ss. 14 and 20 of the Acquisition Act is inconsistent with ss. 74 and 80 of the Act. Grant of permit to run contract carriage is covered by Entry 35 of List III of the Seventh Schedule. Though, the Acquisition Act was made under Entry 42 of List III and has received the assent of the President, by operation of f' s. 74 read with s. 80 and s. 217, the operation of ss. 14 and 20 became void under proviso to Art. 254(2). Sections 14 and 20 also stood repealed by implication. The authorities are, hereby, enjoined to consider the petitioners' applications for grant of contract carriage permits as per the provisions of the Act and the relevant rules. Mr.

Sanghi, learned senior counsel for the S. T. U. , Karnataka, contended that the Acquisition Act was made in exercise of the power under Entry 42 of List III of Seventh Schedule to the Constitution. Its constitutional validity was upheld by this Court. It does not occupy the same field as under the Act. The Acquisition Act, having been reserved for consideration under Art. 254(2) and has received the assent of the President, it prevails over the Act in the State of Karnataka. The Acquisition Act is a "special law" in juxtaposition to the general law under the V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J. )657 Act. The argument of Mr. Sanghi, though apparently at first blush is alluring and. attractive, but on a deeper probe, I find insurmouqtable difficulties in his way to give acceptance to them. The main questions are whether ss. 14 and 20 of the Acquisition Act and ss.

73, 74 and 80 of the Act is "in respect of the same matter" and whether the Act evinces its intention to occupy the same field. 4. At the cost of repetition, it may be stated that ss. 49 to 51 and the relevant rules under the Repealed Act govern the grant of contract carriage permits and in particular the rigour imposed ins. 50 thereof is absent in the Act. The Acquisition Act aimed to acquire the contract carriages. They stood vested in the State Government under s. 4. Incidental and ancillary thereto, the operation of the existing permits or seeking renewal thereof and the pendency of the proceedings in that regard either by way of an application or in appeal or in revision, having statutorily been declared under s. 14(2) to have been abated, the right to obtain permits or special permits afresh or renewal thereof to run contract carriages or stage carriages after expiry of the term, has been frozen to all citizens.

Exclusive monopoly to obtain permits or of the renewal to run them has been given to the S. T. U. , Karnataka. On and from March 12, 1976, s. 20(3) prohibits the authorities concerned to invite or entertain an application or to grant or renew the permits to contract carriage or special permit, except to the S. T. U. , Karnataka. The non-obstenti clause makes clear any cloud of doubts of the applicability of the repealed Act 4 of 1939. After the receipt of the assent of the President, though it is inconsistent with the Repealed Act, its operation is saved by Art. 254(2) of the Constitution. Sections 73 and 74 read with s. 80 of the Act gives to an applicant the right to apply for and to obtain, and obligates the Regional Transport Authority to grant permit to run any public service vehicle as contract carriage throughout the country including the State of Karnataka. Though, s. 80(1) gives discretionary power to grant permit but sub-s. (2) of s.

80 manifests that refusal to grant contract carriage permits appears to be an exception for stated grounds and obviously for reasons to be recorded. 4A. Constitutionalism is the alter to test on its anvil the constitutionality of a statute and Art. 254 is the sole fountain source concerning a State law in the Concurrent List. Article 254(1) deals with inconsis- . tency of law made by Parliament and the law made by the Legislature of a State. Clause (1) adumbrates that the existing law, if it is repugnant with the law made by the Parliament, subject to the provisions of cl. (2), the law made by the 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 repugnancy, be void.

Clause (2) y deals with the 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 the Parliament or an existing one "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, prevails 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. (Emphasis supplied) - 5. In a federal system like ours, there are two streams of law, viz. , Union and State. At times, the citizen subjected to both of laws Central and State will find inconsistency between the obligations imposed on him by those laws or finds variance to avail both laws.

In fact, both the Union and State Legislatures are competent to make O laws on a subject enumerated in the Concurrent List. We are not concerned in this case with regard to Union List or State List. it is quite possible that while legislating upon the subject, they might end up in handing down inconsistent law and the observance of one law may result is non-observance of the other. The citizen will, in such a situation, be at a loss to decide which of the two laws he should follow. To resolve the inconsistency, in other words, to bring about operational uniformity Constitution presses into Service Art. 254. Its forerunner is s. 107 of the Government of India Act, 1935. Both the Parliament and a State Legislature derive their power only under Art. 254 and Art. 246(2) to legislate concurrently on the subjects enumerated in the Concurrent List.

The enumeration of the subjects in the Concurrent List is only for demarcation of legislative heads or distribution of the subject/subjects over which the Parliament and the State Legislature have competence to make law. However, paramouncy has been accorded to the Union Law, making provision in .. Art. 254 firstly as to what would happen in case of repugnancy between the Central and the State law in the concurrent field and secondly resolving such a conflict. The reason is . that there are certain matters which cannot be allocated exclusively either to the Parliament ·)...... or to a State Legislature and for which, though often it is desirable that the State Legislature should make a provision in that regard. Local conditions necessarily vary from State to State and the State Legislature ought to have the power to adopt general legislation to meet the particular circumstances of a State. It is equally necessary that the V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J.

]659 Parliament should also have plenary jurisdiction to enable it in some cases to secure uniformity in the main principles of law throughout the country or in other matters to guide and encourage the States' efforts and to provide remedies for mischiefs arising in the State sphere extending or liable to extent beyond the boundaries of a single State. The subjects like the Indian Penal Code, Civil Pro~edure Code, Criminal Procedure Code, Labour Laws, the Motor Vehicles Act, etc. occupy this area. The essential condition for the application of Art. 254(1) is that the existing law or a law made by the Parliament subsequent to State law, must be with respect to one of the matters enumerated in the Concurrent List. In other words, unless it is shown that the repugnancy is between the provisions of a State law and an existing or subsequent law or amended law etc. of the Parliament in respect of the same specified matter, Art. 254 would be inapplicable. 6.

The Court has to examine in each case whether both the legislations or the relevant provisions therein occupy the same field with respect to one of the matters enumerated in the Concurrent List and whether there exists repugnance between the two laws. The emphasis laid by Art. 254 is "with respect to that matter". Clause ( l) of Art. 254 posits-as a rule that in case of repugnancy or inconsistency between the State law and the Union law relating to the same matter in the Concurrent List occupying the same field, the Union law shall prevail and the State law will fail to the extent of the repugnancy or inconsistency whether the Union law is prior or later in point of time to the State law. To this general rule, an exception has been engrafted in cl. (2) thereof, viz. , provided the State law is reserved for consideration of the President and it bas received his assent, and then it will prevail in that State notwithstanding its repugnancy or inconsistency with the Union law.

This exception again is to be read subject to the proviso to cl. (2) thereof, which empowers the Parliament to make law afresh or repeal or amend, modify or vary the repugnant State law which will become void even though it received President's assent. In short, cl. (1) lays down a general rule; cl. (2) is an exception to cl. (1) and proviso qualifies that exception. The premise is that the law made by the Parliament is paramount and Union and State law must relate to the same subject matter in the Concurrent List. It is, thus, made clear that the Parliament can always, whether prior or subsequent to State law, make a law occupied by the State law. An absurd or an incongruous or irreconcilable result would emerge if two inconsistent laws or particular provisions in a statute, each of equal validity, could coexist and operate in the same territory. 7.

Repugnancy between the two pieces of legislation, generally speaking, means that conflicting results are produced when both laws are applied to the same set of facts. Repugnancy arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and that it is impossible to obey without disobeying the other. Repugnancy would arise when conflicting results are produced when both the statutes covering the same field are applied to a given set of facts. The Court should, therefore, make every attempt to reconcile the provisions of the apparently conflicting enactments, and would give harmoneous construction. There is no repugnancy unless the two Acts or provisions are wholly incompatible with each other or the two would lead to absurd result. The purpose of determining the inconsistency is to ascertain the intention of the Parliament which would be gathered from a consideration of the entire field occupied by the State Legislature.

The proper test is whether the effect can be given to the provisions of both the laws or whether both the laws can stand together. There is no repugnaney if these two enactments relate to different fields or different aspects operating in the same subject. In my considered views, Art. 254 was erigrafted in the Constitution by the founding fathers to obviate such an absurd situation. The reason is obvious that there is no provision in the Constitution that the law made by the Parliament is to be void by reason of its inconsistency with the law made by the Legislature of a State. It may be different if the State law is only to supplement the law made by the Parliament. If both the laws without trenching upon another's field or colliding with each other harmoneously operate, the question of repugnancy does not arise.

It is also axiomatic that if no law made by Parliament occupies the field, the State Legislature is always free to make law on any subject/subjects in the Concurrent List III of the Seventh Schedule of the Constitution. 8. It is seen that the Acquisition Act was made in exercise of the power under Entry 42 of the Concurrent List and ss. 14 and 20 thereof are integral part of the Acquisition Act. Undoubtedly, they are consequential or ancillary to s. 4 thereof. It had received the assent of the President. But after the Act was brought on statute, the question emerges whether there exists no repugnancy between ss. 14(1) and 20(3) of the Acquisition Act in juxtaposition toss. 66(1), 73, 74 and 80 of the Act. Before embarking upon an enquiry into the results produced by these provisions in the light of above discussion, let us consider the relevant decisions and the ratio laid down therein in this context. V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J.

1661 ~/ Occupied Field: I In Tika Ramji v. State of U. P. , [1956] SCR 393. Bhagwati, J. speaking for the Constitution Bench, applied three tests propounded by Nicholas in his Australian Constitution, Second Edition, page 303, to find the inconsistency or repugnancy thus. (1) There may be inconsistency in the actual terms of competing statutes; (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete and exhaustive Code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek ta exercise their power over the same subject matter. (Emphasis supplied). The repugnancy between the two statutes should exist in fact and not depend merely on a possibility. In that case, the question was whether the U. P. Sugarcane (Regulation of Supply and Purchase) Act (Act 24 of 1953) is ultra vires of the U. P. Legislature in view of Art.

246 read with Entry 52 of List I and Item 33 of List III of Seventh Schedule to the Constitution. In that context, it was held that if both the Central Legislature and the Provincial Legislatures were entitled to legislature in regard to this subject of production, supply and distribution of sugarcane, there would arise no question of legislative competence of the Provincial Legislature in the matter of having enacted the impugned Act. Repugnancy falls to be considered when the law made by the Parliament and the law made by the Legislature occupy the same field, because if both these pieces of legislation deal with separate and distinct matters, though of a cognate and allied character, repugnancy does not arise. (Emphasis supplied) So far as our Constitution. is concerned, repugnancy is dealt with in A rt. 254.

On a comparison of various provisions of the State and Central laws, it was held that there was no question of any inconsistency in the actual terms ofthe Act enacted by the Parliament and the impugned Act and they did not occupy the same field. In A. S. Krishna v. Madras State, [1957] SCR 399, the question was whether s. 4(2) of the Madras Prohibition Act which lays down a presumptive evidence is repugnant to the Central legislation, viz. , Criminal Procedure Code. Dealing with s. 107 of the Government of India Act, 1935 which is in pari material to Art. 254 read with Schedule VII, List II, Items 2 and 31 and List III, Items 2 and 5 of Schedule VII to the Constitution, Venkatarama Ayyar, J. speaking for the Constitution Bench, held that for applying s.

107 of the Government of India Act 1935, two conditions must be fulfilled-the provisions of the provincial law and those of the Central legislation must both be in respect of a matter which is enumerated in the Concurrent List; and they must be repugnant to each other. It is only when both these requirements are satisfied that the provisional law will to the extent of repu~nancy becomes void. Section 4(2) of the Prohibition Act was held to be void. In Prem Nath Kaul v. State of J & K, [1959] 2 Supp. SCR 273, another Constitution Bench held that the essential condition for application of Art. 254(1) is that the existing law must be with respect to one of the matters enumerated in the Concurrent List; in other words, unless it is shown that the repugnancy is between the provisions of a subsequent law and those of an existing law in respect of the specified matters, the Artide would be inapplicable. In Bar Council of U. P. v. State of U. P.

, [1973] 2 SCR 1073 the question arose was whether the State Government is empowered to impose stamp duty on the certificate of enrolment under s. 22 of the Advocates Act. In considering schedule VII, List I, Entries 77, 78 and 96; List II, Entry 63 and List III, Entries 44 and 26 and the relevant provisions of the Stamp Act and its Schedules, this Court held that the question of repugnancy can only arise in respect of matters where both the parliament and the State Legislature have competence to pass laws. In other words, when the Legislative power is located in the Concurrent List, the question of ...... repugnancy arises. In Deep Chand v. State of U. P. , [1959] Supp. 2 SCR 8 relied on by Sri Nariman, the Uttar Pradesh legislature made U. P. Transport Service (Development) Act, which had received the assent of the President, introduced a scheme of nationalisation of the transport service. Subsequently, Parliament has amended Act IV of 1939 through Amendment Act 100 of 1956.

By reason thereof, it was contended that the U. P. Amendment Act became void by reason of Art. 254 of the Constitution. The matter was examined by the Constitution Bench of this Court. Subba Rao, J. (as he then was) per majority, while considering the question, laid three propositions to determine the repugnancy thus: (I) Whether there is direct repugnancy between the two provisions; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by the Parliament and the law made by the State Legislature occupy the same field. After examining in detail the provisions of the respective Acts, it was held that after the Central Amendment Act 100 of 1956, it prevailed over the U. P. Act and prospectively became void as the Central Amendment Act occupied the same field in respect of the same schemes initiated under the U. P.

Amendment Act and to that extent the State Act must yield its place to the Central Act. V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J. J663 In State of Orissa v. M. A. Tulloch & Co. , [1964] 4 SCR 461 ~/ another Constitution Bench of this Court held that the inconsistency may be demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. Meeting the argument as to on which Entry in the list the subject falls, it was held thus: "If by reason of the declaration by Parliament the entire ~ subject matter of 'conversation and development of minerals' has been taken over for being dealt with by Parliament, thus depriving the State of the power which it therefore possessed, it would follow that the 'matter' in the State List is, to the extent of the declaration, (substracted from the scope of the declaration) and ambit of Entry 23 of the ' State List.

There would, therefore after the Central Act 67 0 of 1957, be no matter in the List to which the fee could be ' related in order to render it valid. " It was accordingly held that the Orissa Mining Areas Development Fund Act (27 of-1952) to be void. Of course, this was in considering the question under Article 246, Entry 54 of List I, and Entry 23 of List II. -~ In State of Assam v. Horizan Union, [1967] I SCR 484 the facts are that under the Industrial Disputes Act 1947, Section 7-A(3)(a) provided that the appropriate Government may by notification constilute an Industrial Tribunal consisting of one person to be appointed by the appropriate Government. The person shall not be qualified for ...... appointment as presiding officer of the Tribunal unless he is or has been a Judge of a High Court or he has held the office of Chairman or ....

) any other member of the Labour Appellate Tribunal constituted ~nder the Industrial Disputes (Appellate Tribunal) Act, 1950, or of any Tribunal, for a period of not less than two years. Assam Act ·a of :1962 made an amendment to the above procedure and had ~cccivcd the assent of the President, introducing clause (aa) to sub-section (3)(a) of Section 7-A thus: · "He has worked as a District Judge or as an Additional District Judge or as both for a total period of not less than three years or is qualified for appointment as a Judge of High Court; provided that the appointment to a Tribunal of any person qualified under this clause shall not be made without consultation with the Assam High Court. " In 1964, the Parliament made an amendment viz. Industrial Dis- ~ putes (Amendment) Act (36 of 1964) amending Section 7-A(3)(a) stat- f ing that "he has, for a period of not less than three years, been a District Judge or an Additional District Judge.

" The contention raised was that the Assam Act became void by reason of the subsequent Amendment Act of 1964. Both the Parliament and the State Legislalure have exercised_ their power under the Concurrent List of VII ·~ Schedule. Another Constitution Bench of this Court has held that the 1""' Central Amendment Act 36 of 1964 intended to be an exhaustive code in respect of the subject matter and occupies the same field. Therefore, the Assam Act 8 of 1962 was repugnant to the Central Amendment Act 36 of 1964 as it does not require the consultation with the - High Court for the appointment of an Industrial Tribunal. Accordingly, it was held to be void. In State of J & K v. M. S. Farooqi, [1972] 3 SCR 881 the facts ).. __,were that the respondent was a member of the Indian Police Service governed by the All India Services Act, 1951 and the All India Services (Discipline and Appeal) Rules, 1955.

They provided an exhaustive procedure to enquire into the misconduct by a member of the All India Services. The State Legislature, exercising the concurrent power, made Jammu and Kashmir Government Servants' Prevention of Cor- ·~ ruption (Commission) Act, 1962. The validity thereof was questioned on the anvil of Article 254 of the Constitution. Dealing with the subject, another Constitution Bench, speaking through Sikri, C. J. held that the Commission Act empowers to conduct on enquiry into the charges of corruption and misconduct against all Government Servants including the members of All India Services. In addition to the recom- . f-mendation for imposition of punishment engrafted in sub-section (2) of Section 17 of the Commission Act, it also disqualifies for any public '-. /,- .... , office to a specified period and also recommendation for prosecution r for an offence in a Court of law. These details were not dealt with under the Central Act and the Rules.

From this conspectus, this Court further held thus: "It seems to us that in so far as the Commission Act deals with the infliction of disciplinary punishments it is repugnant to Discipline and Appeal Rules. Parliament has occupied the field and given clear indication that this was the only manner in which any disciplinary action should be taken against the members of the All India Services ,, V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY. J. 1665 Accordingly it was held that the State Act must be read down so as to leave the members of the All india Services outside its purview. There_by, by implication it was held that by operation of Article 254 of the Constitution the Commission Act is repugnant to the All India Services Act and Rules. In Kera/a State Electricity Board v. Indian Aluminium Co.

, I 1976) I SCR 552 another Constitution Bench of this Court held that: "Having discussed the question of the legislative field it might be necessary to discuss the question as to what happens if it should be held that the matter under consideration in these cases falls within the concurrent list, that is, Entry 38 in List III as contended in the alternative by some of the respondents. As already mentioned the question will arise only if it should be held that the Kerala State Act falls under Entry 38 as contended by Mr. B. Sen. If the impugned legislation falls under List III tuen the question of repugnancy of that legislation with the existing law or the law made by Parliament as the case may be, will have to be considered. " In Basu's Commentary on the Constitution of India (Silver Jubilee Edition), Volume K, at page 144, it is stated that "the repugnancy to be found is the repugnancy in the actual provisions of two laws and not the subject matter of the two laws.

The proper test is whether effect can be given to the provisions ofboth the laws or whether both the laws can stand together. " (Emphasis added). It is trite law that the form of the provision does not conclude the matter. It must be the "same matter" under consideration. Operational Incompatibility: 9. Repugnancy could also be angulated from the perspective of operational incompatibility as well. The celebrated decision in Clyde Engineering Co. v. Cowburn, [1926) 37 CLR 466 popularly known as 44-hour case, is a leading authority on this topic. The facts therein are that a Commonwealth Arbitration award fixed rates of pay and overtime on the basis of 48-hour working week while Forthfour Hours Week Act 1925 (NSW) S. 6 purported to deal with the same matter on the basis of 44-hours working week. The respondent employee claimed the State Act rate of pay but was denied on the basis of 48-hours working week.

When questioned, it was argued that there was no inconsistency between the award and the State Act because the employer, it was said, could obey both laws by observing the 44-hours working week but on the basis that the pay scale determined by the award applied to the 44-hours working week. The High Court of Australia relying on s. 109 of Australian Constitution rejected the argument and found that an inconsistency existed, as the State law operated to vary the adjustment of industrial relations established by the Commonwealth award. Knox, C. J. held that two enactments may be inconsistent although obedience to each of them may be possible without disobeying the other. Statute may do more than impose duties; they may for instance confer rights; and one statute is inconsistent with another when it takes away a right conferred by the other even though the right may be one which might be waived or abandoned without disobeying the statute which conferred it. Issacc, J.

in his separate but concurrent judgment held: "The vital question would be: was the second Act in its true construction intended to cover the whole ground, and therefore, to supersede the first? If it was intended, then the inconsistency would consist in giving operative effect at all to the first Act; because the second was intended entirely to exclude it. The suggested test however useful a working guide it may be in some cases prove a test; cannot be recognised as the standard measuring rod of inconsistency. If, however, a competent legislature expressly or impliedly evinces its intention to cover the whole field, that is a conclusive test ofinconsistency where another legislature assumes to enter to any extent upon the same field .. If such a position as I have postulated be in fact established .

, the inconsistency is demonstrated not by comparison of detailed provisions but by the existence of the two sets of provisions; where that wholesale inconsistency does not occur but the field in partly open, then it is necessary to enquire further and possibly to examine and contrast particular provisions. If one enactment makes or acts upon as lawful that which the other makes unlawful or if one ~ enactment makes unlawful that which the other makes or acts upon as lawful, the two or to that extent inconsistent. It is plain that it may be quite possible to obey both simply by not doing what is declared by eitber to be unlawful and yet there is palpably inconsistency. The basic reason is that the V. K. SHARMA v. STATE OF KARNATAKA {K. RAMASWAMY. J. 1667 Constitution clearly intended that once the Commonwealth settled an interstate dispute, that settlement shall stand and that its terms should be framed by the one hand, the other · being necessarily excluded.

Forty-four houcs shall constitute a week's work. No day's work to exceed either hours without payment for overtime, etc. " Higgins, J. has held that: "When is a law inconsistent with another law? Etimologically I presume that things are inconsistent when they can- . not stand together at the same time and law is inconsistent with another when the command or power or provision in one law conflicts directly with the command, power or other provision of another. Where two legislations operate over the same territory and came into collision, it is necessary that one 'should prevail, but the necessity is confined to actual collision as one legislature says 'do' and the other says 'do not'. (Emphasis supplied) ~ . [n that case it was held that there is operational incompatibility between the Commonwealth award and the State law. The State law was held to be void. In Hume v.

Palmer, [1926] 38 CLR 441 both New South Wales Act and Commonwealth Act authorised making of the Regulations dealing with collisions at sea. In both cases regulations had been made. They were in identical terms except that in relation to the jurisdiction to convict for breaches. The New South Wales regulations prescribed summary prosecution and a maximum penalty of £ 50 whereas the Commonwealth regulations prescribed summary prosecution on indictment and a maximum penalty £ 100. [t was held that the same facts produced different legal results under the two Acts, the penalty under State law was held displaced. In R. v. B~isbane Licensing Court, [1920] 28 CLR 23 a section of the Commonwealth Electoral Act provided that on a polling day fixed --'. for a federal election, a referandum or vote of the electors of a State or part thereof, should not be taken. A local option poll had been taken on such a day under Queensland legislation.

It was held that a direct inconsistency existed, and that the local option poll was, therefore, declared to be invalid. Jn Colvin v. Bradley Bros. Pvt. Ltd. , [1943] 68 CLR 151 an order made pursuant to a section of New South Wales ''f' Factories and Shops Act prohibiting the employment of women on a ; milling machine. An award had been made by the Commonwealth Arbitration Court under the Conciliation and Arbitration Act which permitted the employment of females on work, which included work on a milling machine, unless the work was declared to be unsuitable I for women by a Board of Reference. No such declaration had been ~made by the Board. it was held that the order was inconsistent with the award by virtue of s. 109 in that it directly prohibited something which the Commonwealth award permitted. .. In In Re Ex Parte Maclean, [1930] 43 CLR 472 at 483. Dixon J.

held: "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct should be, they make laws which are inconsistent notwithstanding that the rule of conduct is identical, which each prescribes, and s. 109 applies. " It was further held that the Federal statute had evinced an intention to cover the subject matter and provide what the Jaw upon it should be. In Wenn v. Attorney General (Victoria), [1948] 77 CLR 84 the Re-establishment and Employment Act dealt with the obligations of employers' to give preference to ex-servicemen in employment (but included no provision as to the duty to give preference in promotion to ex-servicemen already employed). The State Act dealt not only with the same matter, but also included a provision requiring employers to give preference in promotion.

It was held that Commonwealth Legislation was an exhaustive code allowing no room for the operation of the State legislation relating to matter not covered by the Commonwealth Act. The Victorian Law giving preference in promotion was, therefore, held to have been displaced. In O'Sullivan v. Noarlunga Meat Co. Ltd. , [1954] 92 CLR 565 the facts are that the South Australian Act prohibited laughter of stock for export without a State licence while the Commonwealth Act prohibited export of meat from stock which had not been slaughtered on premises registered under the regulations thereof. In an evenly divided Court, the opinion of the Chief Justice had prevailed, it was held that the Commonwealth regulations were detailed enough to show that V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J. ] 669 .. ,. , they covered the whole field of 'slaughter for export' and, therefore, the State licensing requirement did not apply. On further appeal the Judicial Committee in 0. Sullivan v.

Noarlunga Meat Co. Ltd. , [1957] AC 1at28 added that "in applying this principle it is important to bear in mind that the relevant field or subject is that covered by the law said to be invalid. " ~. In Australian Federal Constitutional Law by Collin Howard, Second Edition (1972), at page 27, it was stated that where both a Commonwealth Law and a State law are in terms applicable to a given set of facts, and they produce conflicting legal results on those facts, the Commonwealth law applies and not the State law. In Blackley v. Devondale Cream (Vic. ) Pvt. Ltd. , [1968] 117 CLR 253, a State wages determination prescribed a minimum rate of pay for certain work ~J which was also covered by a Commonwealth award. The Common- • wealth award prescribed a lower minimum rate. It was held that there was a direct inconsistence because on the same facts the two laws produced different entitlements. The award rate, therefore, prevailed over the State's determination. 10.

REPEAL BY IMPLICATION: Sub-s. (1) of s. 217 of the Act repeals thus: "The Motor Vehicles Act, 1939, and any law corresponding to that Act in force in any State immediately before the commencement of this Act (hereafter in this section referred to as the repeal enactments) are hereby repealed. " "" ' (The other sub-sections are not relevant. Hence omitted. ) ) (Emphasis supplied) Thereby s. 217(1) does not expressly repeal sections 14(1) and 20(3) of the Acquisition Act. In Zaveribhai v. State of Bombay, [1955] I SCR 799 relied on by Sri Nariman, the facts were thats. 7 of the Essential Supplies (Temporary Powers) Act, 1949 provides penalty for contravention of orders issued under s. ·3 for a term of three years or with fine --". or with both. The Bombay Legislature amended the Act, by Act 52 of 1950. Section 2 of the Amendment Act provides that ·'notwithstanding anything contained in Essential Supplies (Temporary Powers) Act, 1946, whoever contravenes an order made under Sec.

3 of the Essential Supplies (Temporary Powers) Act, shall be punishable with imprisonment for a term which may extend to seven years but shall not, I except for reasons to be recorded in writing, be less than six months 'f'1 and shall also be liable to fine". Thus, the Bombay Act imposes minimum sentence while indicating maximum sentence and obtained' the assent of the President. Later, the Central Act was amended in 1948, 1949 and 1950. In 1950 Act, Sec. 7 categorised three groups of offences covering the same field and imposd graded sentences depending on the character of the offence and the nature of the commodity ~i contravened. The Bombay Act was challenged on the ground that it was repugnant and was repealed by implication. Venkatarama Iyer, J. speaking for the Constitution Bench held that repugnancy might result when both the legislations cover the same field.

It was further held: - "The important thing to consider with reference to this provision is whether the legislation in '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 Art. 254(2) will have no application. The principle embodied in s. 107(2) and Art. 254(2) is that when there is legislation covering the same ground both by the Centre and by the Province, both of them being competent to enact the same, the Jaw of the Centre should prevail over that of the State. " It was further held that though there is no express repeal, even then the State law will be void under the proviso if it conflicts with later law with respect to the same matter that may be enacted by the Parliament.

The principle on which the rule of implied repeal rests, namely, that if the subject matter of later legislation is identical with that of the earlier, so that they cannot both stand together then the earlier is repealed by the later enactment, will be equally applicable to a question under Art. 254(2) where the further legislation by Parliament is in respect of the same matter as that of the State law. Accordingly, it was held that Sec. 2 of the Bombay Act, No. 36 of 1947 cannot prevail as against Sec. 7 of the Essential Supplies (Temporary Powers) Act as amended by Act 52 of 1950. The doctrine of repugnancy and implied repeal was again considered by this Court in M. Karunanidhi v. Union of India, [1979] 3 SCR 254 where the Tamil Nadu Public Men (Criminal Misconduct) Act (2 of 1974) was assailed to be repugnant to the Indian Penal Code and the Prevention of Corruption Act 1947. In considering that question, Fazal Ali, J. speaking for the Constitution Bench held: V. K. SHARMA v.

STATE OF KARNATAKA [K. RAMASWAMY, J. ]671 " ... So far as the Concurrent List is concerned, both Parliamen! 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 Art. 254(1). Where the provisions of the Central Act and a State Act in ~- the Concurrent List are fully inconsistent and are absolutely irreconciliable, the Central Act will prevail and the State Act will become void in view of the repugnancy. Where, however, a law passed by the State comes into 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 Ac;t has been passed -1. in accordance with Cl. (2) of Art. 254.

Where a law passed by the State Legislature the entries in the State List entrenches upon any of the entries in the Central List the consitutionality of the law may be upheld by invoking the doctrine on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by the Parliament, then such a law can be protected by obtaining the assent of the President under Art. 254(2) of the Construction. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliamen! 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.

" Dealing with the question of repeal by implication, it was held that there is no repeal by implication unless the inconsistency appears on the face of the two statutes that where two statutes occupy a particular · field but there is a room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results and that where there is no inconsistency, a statute occupying the same field seeks to create distinct and separate offence, no question of repugnancy arises and both the statutes continue to operate in the same field. On a comparison of the relev. ant provisions of the )mpugned Act and the Central Acts, it was not repealed by implication. In T. Barai v. Henry Ah Hoe, [1983] l SCR 905 relied on by Sri ~ Nariman, the facts are that for an offence under Sec. 16(l)(a) read with Sec. 7 of the Prevention of Food Adulteration Act, 1954, prescribed maximum punishment of six years.

But the West Bengal Legislature amended the Central Act with effect from April 29, 1974 by the Prevention of Adulteration of Food, Drugs and Cosmatics (West Bengal) (Amendment) Act, 1973, providing punishment with impri- J sonment for life and triable by a Court of Sessions. It had received the assent of the President. Later on the Parliament amended the Section (Section 16(a) and also introduced Section 16-A in 1976 to the Prevention of Food Adulteration Act, 1954, imposing punishment of three years. Both the enactments have been made in exercise of the concurrent power. In considering the question whether the State Act became void, A. P. Sen J. speaking for three Judges' Bench has held thus: "There is no doubt or difficulty as to the law applicable. Art.

254 of the Constitution makes provision firstly, as to what would happen in the case of conflict between a Central and State Law with regard to the subjects enumerated in the Concurrent List, and secondly, for resolving such conflict, Art. 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State Law in the concurrent field, the former prevails over the latter. Clause (1) lays down that if a State law relating to a concurrent subject is 'repugnan. t' to a Union law relating to that subject, then, whether the Union law is prior or later in time, the Union law will prevail and the State law shall, to the extent of such repugnancy, be void. To the general rule laid down in Clause (1), Clause (2) engrafts an exception, viz. , that if the President assents to a State law which has been y reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject.

In such a case, the Central Act will give way to the StateAct only to the extent of inconsistency between the two, and no more. in short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will prevail in that State and override the provisions of the Central Act in their applicability to that State only. The predominance of the State law may, however, be taken away if Parliament legislate under the proviso to Clause (2). The proviso to Art. 254(2) empowers the Union Parliament to V. K. SHARMA v. STA1E OF KARNATAKA [K. RAMASWAMY, J. ] 673 .. repeal or amend a repugnant State law even though it has become valid by virtue of the President's assent. Parliament may repeal or amend the repugnant State law, either directly, or by itself enacting a law repugnant to the State law with respect to the 'same matter'.

Even though the subsequent law made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made. A State law would be repugnant to the Union law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together, e. g. where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed, In all such cases, the law ,-A. made by Parliament shall prevail over the State law under Art. 254(1). That being so, when Parliament stepped in and enacted the Central Amendment Act, it being a latter law made by Parliament 'with respect to the same matter', the West Bengal Amendment Act . stood impliedly repealed. " t In Mis Hoeshst Pharmaceuticals Ltd. v.

State of Bihar, [1983] 3 SCR 130 the Bihar Finance Act, 1981 was made in exercise of the ) power under Entry 54 of List II of Seventh Schedule to the Constitulion amending and repealing the previous Act providing therein to levy tax on sale or purchase of goods. Section 5(1) imposes levy of t surcharge on every dealer whose gross turnover during an year exceeds Rupees Five lakhs, in addition to the tax payable by him at such rate not exceeding 10 per cent of the total amount of tax. Sub-s. (3) of s. (5) ·1 prohibits such dealer from collecting the amount of surcharge from the purchasers. The Essential Commodities Act made under Entry 33 of the Concurrent List III empowering the Government to fix prices of the essential commodities including drugs, medicines, etc. It was conten- <led that by operation of sub-s. (1) of s. 5, the State Act is repugnant and is void. In considering that question, A. P. Sen, J.

speaking for three Judges' Bench held that both the Union and the State Legisla- ..... ture have concurrent powers of legislation with respect to any of the ' matters enumerated in List III, subject only to the proviso contained in cl. (2) of Art. 254, i. e. provided the State Act do not conflict with those of any Central Act on the subject . . . . The question of repugnancy arises only when both legislatures are competent to legislature in the same field, i. e. when both Union and the State laws relate to a specified subject in List III and occupy the same field. Yet another place it was held that it is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy became void. Art. 254(1) has no application to the cases of repugnancy due to overlapping found between List II on the one hand and Lists I and II on the other. If such overlapping exists in any particular case, State law will be ultra vires because of the non obstenti clause in Art.

246(1) read with opening words-"Subject to" Art. 246(3). In such cases, the State law will fail not because of repugnance in the Union List but due to want of legislative competence. Repugnancy arises where there is a direct conflict or collision between the Central Act and the State Legislation and to the extent of repugnancy by necessary implication or by express reference the State legislation stands repealed. " 11. It is true, as rightly contended by Mr. Sanghi, that ss. 14 and ), 20 are consequential or ancillary to s. 4 of the Acquisition Act 21 of / 1976 which had received the assent of the President. Its constitutionality was upheld by seven Judges' Bench of this Court, when the legislative competence was assailed on the anvil of Entry 42 of List I of the Seventh Schedule, but not on the touchstone of proviso to cl. (2) of Art. 254 which gives overriding power to the Parliament to make any law or amend, vary, modify or repeal the law made by a State Legisla- -. , ture.

Ranganatha Reddy's ratio, thereby, does not stand an impediment to go into the validity of ss. 14 and 20 of the Acquisition Act. 12. The result of the above discussion leads to the following conclusions: (a) The doctrine of repugnancy or inconsistency under Art. 254 of the Constitution would arise only when the Act or provision/ provisions in an Act made by the Parliament and by a State Legislature on the same matter must relate to the Concurrent List III of Seventh Schedule to the Constitution; must occupy the same field and must be repugnant to each other; (b) In considering repugnance under Art. 254 the question of legislative coinpetence of a State Legislature does not arise since the Parliament and the Legislature of a State have undoubted power and jurisdiction to make law on a subject, i. e. in respect of that matter. In other words, same matter enumerated in the Concurrent List has occupied the field. (c) If both the pieces of legislation deal with separate and dis- V. K.

SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J. ]675 lt' .. • tine! matters though of cognate and allied character repugnancy I does not arise. (d) It matters little whether the Act/Provision or Provisions in an Act falls under one or other entry or entries in the Concurrent List. The substance of the "same matter occupying the same field by both the pieces of the legislation is material" and not the form. The words "that matter" connotes identity of "the matter" and not their proximity. The circumstances or motive to make the Act/Provision or Provisions in both the pieces of legislation are irrelevant. (e) The repugnancy to be found is the repugnancy of Act/ provision/Provisions of the two laws and not the predoninant object of the subject matter of the two laws.

(f) Repugnancy or inconsistency may arise m diverse ways, which are only illustrative and not exhaustive: (i) There may be direct repugnancy between the two provisions; (ii) Parliament may evince its intention to cover the whole same field by laying down an exhaustive code in respect thereof displacing the State Act, provision or provisions in that Act. · The Act of the Parliament may be either earlier or subsequent to the State law; (iii) Inconsistency may be demonstrated, not necessarily by a detailed comparison of the provisions of the two pieces of law but by their very existence in the statutes; (iv) Occupying the same field; operational incompatibility; irreconcilability or actual collision in their operation in the same territory by the Act/provision or provisions of the Act made by the Parliament and their counter parts in a State Jaw are some of the true tests; .

G (v) Intention of the Parliament to occupy the same field held by the State Legislature may not be expressly stated but may be implied which may be gethered by examination of the relevant provisions of the two pieces of the legislation occupying the same field; (vi) If one Act/Provision/Provisions in an Act makes lawful that ·'f/f which the other declares unlawful the two to that extent are inconsistent or repugnant. The possibility of.

obeying both the laws by waiving the beneficial part in either set of the provisions is no sure test; (vii) If the Parliament makes law conferring right/obligation/ privilege on a citizen/person and enjoins the authorities to obey 4 the· 1aw but if the State law denies the self same rights or privileges negates the obligation or freezes them and injuncts the authorities to invite or entertain an application and to grant the right/privilege conferred by the Union law subject to the condition imposed therein the two provisions run on a collision course and repugnancy between the two pieces of law arises thereby; (viii) Parliament may also repeal the State law either expressly or by necessary implication but Courts would not always favour repeal by implication. Repeal by implication may be found when the State law is repugnant or inconsistent with the Union law in its scheme or operation etc.

and conflicting results would ensue when both the laws are applied to a given same set of facts or cannot stand together or one law says do and other law says do not do. In other words, the Central law declares an act or omission lawful while the State law says them unlawful or prescribes irreconcilable penalties/punishments of different kind, degree or variation in procedure etc. The inconsistency must appear on the face of the impugned statutes/provision/provisions therein; (ix) If both the pieces of provisions occupying the same field do not deal with the same matter but distinct, though cognate or allied character, there is no repeal by implication; (x) The Court should endeavour to give effect to both the pieces of legislation as the Parliament and the legislature of a State are empowered by the Constitution to make laws on any subject or subjects enumerated in the Concurrent List III of Seventh Schedule to the Constitution.

Only when it finds the incompatibility or irresconcilability of both Acts/provision or provisions, or the two laws cannot stand together, the Court is entitled to declare the State law to be void or repealed by implication; and (xi) The assent of the President of India under Art. 254(2) given to a State law/provision, provisions therein accord only opera- V. K. SHARMA v. STATE OF KARNATAKA ! K. RAMASWAMY, J. ]677 tional validity though repugnant to the Central law but by subset/ quent law made by the Parliament or amendment/modification, ' variation or repeal by an act of Parliament renders the State law void. The previous assent given by the President does not blow life into a void law. Scope and operation of Rule of Pith and Substance and predoninant purpose vis-a-vis Concurrent List. 13. The further question is whether the doctrines of dominant purpose and pith and substance would be applied to the matter covered under the Concurrent List. in my considered view, they do not apply.

The doctrine of pith and l"ubstance primarily concerns in determining the legislative competence. The idea underlying the detailed distribution of legislative powers in three Lists was to ensure that Parliament and State Legislatures should keep themselves within the spheres allocated to them in List I and vice versa in List II respectively. However, legislation is a very complicated matter as it reflects life, which itself is a complicated one. Hence, it is sometimes inevitable that a law passed by the Parliament may trench upon the domain of the State Legislature and vice versa. Would such incidental encroachment on the territory of the other invalidates the legislation? In examining this question and finding a solution, the Courts try to save the legislation from unconstitutionality by applying the flexible rule of pith and substance.

It is not that the Courts encourage one legislature to encroach upon the legislative field of another legislature but merely recognise the reality that despite the strict demarcation of legislative fields to respective legislatures, it is not always possible to effectuate a legislative purpose without incidental encroachment on another's field. In such a situation the Courts try to find out the pith and substance of the legislation. If the legislation is found in its pith and substance, within the legislative competence of the particular legislature, it is held to be valid, despite incidental encroachment on the legislative power of another legislature. Thus, the rule of pith and substance is applied to determine whether the impugned legislation is within that competence under Arts. 246(1) and 246(3) of the Constitution, and to resolve the conflict of jurisdiction. If the Act in its pith and substance falls in one List it must be deemed not to fall in another List, _.

, despite incidental encroachment and its validity should be determined accordingly. The pith and substance rule, thereby, solves the problem of overlapping of "any two entries of two different List vis-a-vis the Act" on the basis of an inquiry into the "true nature and character" of the legislation. The Court examines the legislation as a whole and tries to find whether the impugned law is substantially within the competence of the Legislature which enacted it, even if it incidentally trespasses into the legislative field of another Legislature. In a case where the question of validity of an act arises, it may be that the topic underlying the provisions of the Act may in one view of the matter falls within the power of the Centre, and on another view within the power of the States. When this happens, it is necessary to examine the pith and substance of the impugned legislation; and to see whether in its pith and substance it falls within one, or the other of the Legislative Lists.

As stated earlier the constitutionality of the Impugned Act is not determined by the degrees of invasion into the domain assigned to the other legislature but its pith and substance and its true nature and character to find whether the matter falls within the domain of the enacting legislature. The incidental or ancillary encroachment into forbidden field does not effect the competence of the legislature to make the impugned law. 14. From this scenerio let us peep into few important decisions touching the subject. In Prafulla Kumar v. Bank of Commerce, Khulna, AIR 1947 PC 60 the question was whether the Bengal Moneylenders Act (JO of 1940) is ultra vires by re~son of Schedule 7, List II, Items 28 and 38 of the Government of India Act, 1935, and thereby is void. In considering that question, the Judicial Committee held as culle<:] out in Head note (b) thus: "It is not possible to make a clean cut between the powers of the Federal and Provincial Legislatures.

They are bound to overlap and where they do the question to be considered is what is the pith and substance of the impugned enactment and in what list is its true nature and character to be found. The extent of invasion by the Provinces into subjects in Federal List is an important matter not because the validity of a Provincial Act can be determined by discriminating between degrees of invasion but for determin- • ing the pith and substance of the impugned Act. The question is not has it trespassed more or less but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not a Provincial matter but a Federal matter. Once that is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true import. No doubt where they come in conflict List I has priority V. K. SHARMA v. STATE OF KARNATAKA [K. RAMASWAMY, J.

1679 over Lists III and II and List III has priority over List II but in each case one has to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character" This leading ratio formed foundation in countless cases decided by this Court. In State of Bombay v. F. N. Balsara, [1951] SCR 682 it was held that: "It is well settled that the validity of an Act is not affected if it incidentally trenches on matters outside the authorised field and, therefore, it is necessary to enquire in each case what is the pith and substance of the Act impugned. If the Act, when so viewed, substantially falls within the powers expressly conferred upon the Legislature which enacted it ,Ii. , then it cannot be held to be invalid merely because it incidentally encroaches on matters which have been assigned to another Legislature. " In Atiabari Tea Co. Ltd. v. State of Assam, [1961] 1 SCR 809 Gajendragadkar, J.

(as he then was) speaking per majority, has explained t the purpose of the rule of pith and substance thus: "The test of pith and substance is generally and more appropriately applied when a dispute arises as to the legislative competence of the legislature, and it has to be resolved by reference to the entries to which the impugned legislation is relateable, when there is a conflict between the two entries in the legislative list, and legislation by reference to one entry would be competent but not by reference to other, the doctrine of pith and substance is invoked for the purpose of determining the true nature and character of the legislation in question ... In Meghraj & Ors. v. Allaharakhiya & Ors. , AIR 1942 FC 27 relied on by Sri Nariman, the contention raised was that when the matter in the Concurrent List had occupied the flied whether the question of pith and substance of the impugned Act would arise?

The Federal Court held that when the Provincial Act is objected to as contravening not Sec. 100 but Sec. 107(1) of the Government of India Act 1935, which is in pari materia to Art. 254 of the Constitution, that the question of pith and substance of the impugned Act does not arise. In Tika Ramji's case, the same question had arisen for resolution. It was held that- "The pith and substance argument also cannot be imported --.. here for the simple reason that when both the Centre as well as the State Legislatures were operating in the Concurrent field, there was no question of any trespass upon the exclusive jurisdiction vested in the Centre under Entry 52 of List I, the only question which survived being whether, pudttinhg boSth the pieces of legislation enacted by the Centre ~ an t e late legislature together, there was any repugnancy a contention which will be dealt with hereafter.

" I have no hesitation to hold that the doctrine of pith and substance on the predoninant purpose, or true nature and character of the law have no application when the matter in question is covered by an entry or entries in the Concurrent List and has occupied the same field both in the Union and the State Law. It matters little as to in which entry or entries in the Concurrent List the subject-matter falls or in exercise whereof the Act/provision or provisions therein was made. The Parliament and Legislature of the State have exclusive power to legislate upon any subject or subjects in a Concurrent List. The question of incidental or ancillary encroachment or to trench into forbidder field does not arise. The determination of its 'true nature and character' also is immaterial. 15. Power to legislate whether derived from the concerned A rticles or legislative lists in Seventh Schedule 16. Parliament and the Legislature of any state derive their power from Art.

246(2) of the Constitution to make laws with respect to any of the matters enumerated in List III of the Vllth Schedule to the Constitution. With a non-ohstanti clause engrafted therein namely '( notwithstanding anything in Clause :;, the 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 Ill. List Ill of Seventh Schedule enumerates the Iegislativ,e heads over which the appropriate Legislature can operate. The function of the list is not to confer power on either the Parliament or a State Legislature. Article 254 of the Constitition removes the inconsistency between the law made by the Parliament and by the Legislatures of States. Thus the ;. power to legislate on the Concurrent List is derived by the Parliament and the Legislature of any State from Article 246(2) read with Article 254 only.

Paramouncy to the law made by the Parliament is given by Article 254(1) and proviso to Article 254(2). The Parliament derives its exclusive power under Article 246(1) to legislate upon any of the V. K. SHARMA v. STATE OF KARNATAKA. [K. RAMASWAMY, J. J 681 subjects enumerated in List I of the Seventh Schedule in the Constitu- tion. Similarly the Legislature of a State derives its exclusive power from Article 246(3) to make laws on any matters in List II. When the Parliament or the Legislature of a State while making legislation within its exclusive domain, namely, List I or List II respectively if it incidentally trenches upon the forbidden flied, namely, the field demarcated or distributed to the State Legislature and vice versa by the Legislature into List I the doctrine of Pith and Substance was applied to find the. "true purpose and character of the Legislation". In considering the question of the doctrine of Pith and Substance in Subrahmanyam Chettiar v. Muttuswami Goundan, A. LR.

1941 F. C. 47 at p. 51 held that it must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enact- _;i ment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its "pith and substance", or its "true natue and character", for the purpose of determining whether it is legislation with respect to matters in this list or in that. In that case the question , t was whether the Madras Agriculturists Relief Act 4 of 1938, Section 8 thereto is invalid, since the matter is in Schedule VII, List I or List II of the Government of India Act, 1935.

The contention was that the negotiable instrument; promissory notes are covered by List I of the Seventh Schedule, therefore, the Act is invalid. In considering that question and negativing the contention the above ratio was enun- "' ciated. ·r· (emphasis supplied) In Governor General in Council v. The Reliegh Investment Co. Ltd. , [1944] F. C. R. 229 at p. 261 in considering the question whether the Federal Legislature's power is not limited to cases specified in clauses (a) to (e) of sub-section (2) of Section 99 from Entry No. 23 of the List I of the Seventh Schedule; it was held by Spens, C. J. that it would not be right that the Legislature would derive the power to legislate on this topic merely from the reference to it in the List, because the purpose of ~, the Lists was not to create or confer powers, but only to distribute between the Federal and the Provincial Legislatures, the powers which had been conferred by Section 99 and 100.

(emphasis added) In Harakchand Ratanchand Banthia v. Union of India, [1970] 1 ''111111 SCR 479 at p. 489 the Constitution Bench speaking through ,. Ramaswami, J. dealing with the Gold (Control) Act (45 of 1968) observed thus: "Before construing these entries it is useful to notice some of the well-settled rules of interpretation laid down by the Federal Court and by this Court in the matter of construing the entries. The power to legislate is given to the appropriate legislature by Article 246 of the Constitution. The entries in the three Lists are only legislative heads or fields of legislation; they demarcate the area over which the appropriate legislatures can operate. " (emphasis added) )- In Union ofIndia v. H. S. Dhillion, I1972] 2 SCR 33 at p. 52 Sikri, C. J. speaking per majority of Seven Judges' Bench held that it must be remembered tbat the function of the lists is not to confer powers; they merely demarcate the legislative field.

The Constitution Bench followed the ratio in Releigh Investment case, etc. (emphasis supplied) 16. Thus I hold that the Parliament and the legislature of a State derive their power to legislate on a subject/subjects in Lists I and List £ II of Seventh Schedule to the Constitution from Art. 246(1) and (3) respectively. Both derive their power from Art. 246(2) to legislate upon a matter in the Concurrent List III subject to Art. 254 of the Constitution. The respective lists merely demarcate the legislative field or legislative heads. The Parliament and the legislature of a State have concurrent power to legislate upon any subject/subjects in the Concurrent list III of Seventh Schedule to the Constitution. Art. 254(1) and proviso to Art. 254(2) give paramouncy to the law made by the Parliament, whether existing or made afresh or amended, modified, added or repealing the law subsequent in point of time to the state law made under Art. 254(2).

The exercise of the power by a state legislature to make impugned law under one entry or other in the concurrent list is not decisive. The concerned entry or entries is not the source of power to make impugned law. 17. Keeping the principles laid hereinbefore at the back of our mind, let us consider the impugned provision. Section 14 read with s. 20 of the Acquisition Act (21 of 1976) freezed the right of a citizen to apply for an to obtain permit or special permit to run a contract car- V. K. SHARMA '· STATE OF KARNATAKA {K. RAMASWAMY, J. 1683 . ,, riage in terms of the permit and monopoly to run a contract carriage was conferred on the S. T. U. , Karnataka. But the Act evinces its intenlion to liberalise the grant of contract carriage permit by saying in s. 80(2) that the Regional Transport Authority "shall not ordinarily refuse to grant the permit.

" It also confers the right on an applicant to apply for and authorises and Regional Transport Authority to grant liberally contract carriage permit except in the area covered bys. 80(3) ~ and refusal appears to be an exception, that too, obviously for reasons to be recorded. It may be rejected if the permit applied for relate to an approved or notified route. The Act accords the right, while the Acquisition Act negates and freezes the self-same right to obtain a permit and to run a contract carriage and prohibits the authorities to invite or entertain an application and to grant a permit to run contract carriage. the Act and the relevant rules cover the entire field of making an application in the prescribed manner and directs the Regional ( Transport Authority to grant permit with condition attached thereto to . _run contract carriages vide ss. 66(1), 73, 74 and 80 of the Act. Thus, ti)e existence of two se!

l_ of provisions in the Act 59 of 1988 and ACquisition Act 21of1976 is sufficient to produce conflicting results in theii' ()peration in the same occupied field. The two sets of provisions run on. collision course, though an applicant may waive to make an application for a permit. Thereby, there exists the operational incom! r patibility and irreconcilability of the two sets of provisions. Sections 14( 1) and 20(3) of the Acquisition' Act are repugnant and inconsistent of ss. 73, 74 and 80 of the Act. By operation of proviso to Art. 254(2) of the Constitution, the embargo created by ss. 14(1) and 20(3) of the Acquisition Act (21 of 1976) to make or invite an application and injunction issued to Regional Transport Authority prohibiting to grant contract carriage permit to anyone except to S. T. U. , Karnataka. within the State of Karnataka became void. 18.

For the applicability of the principle that special law prevails over the general law, the special law must be a valid law in operation. Voidity of law obliterates it from the statute from its very inception. In view of the finding that ss. 14(1) and 20(3) are void the contention that the ·special law prevails over the general law is without substance. In Justiniano Augusto De Peidada Barreto v. Antonia Vicenta De Fonseca & Ors. , [1979] 3 SCR 494 s. 5(1) of the Goa, Daman and Diu ( (Administration) Act, 1