This article is written by Lavanya Gupta. It analyses the decision of Vijay Kumar Sharma with respect to the application of Article 254 of the Constitution and the doctrine of pith and substance in the context of the Motor Vehicles Act,1988.

This article has been published by Shashwat Kaushik.

Introduction 

Vijay Kumar Sharma vs. State of Karnataka (1990) is a landmark decision concerning the doctrine of repugnancy with respect to Article 254 of the Constitution wherein provisions of a Union law are in direct conflict with the provision of State legislation on a subject falling within List III of the Seventh Schedule. The case determines the effect of such repugnancy between a Union Law and a State law, in the specific instance of The Motor Vehicles Act, 1988 (hereinafter referred to as the Act, 1988). It explains which law shall prevail and what should be the extent of repugnancy to provoke the operation of Article 254. Further, it also clarifies the scope of the doctrine of pith and substance which discusses the true purpose behind a law. 

The Court clarified that if the dominant nature of both laws is quite different, there is no question of repugnancy. The doctrine of repugnancy has an important effect on our federal structure and on the sanctity of the division of powers, making this case a landmark decision in constitutional law. This article will cover the afore-mentioned case which primarily dealt with the inconsistency between the provisions of the Act, 1988 and a Karnataka State law on the subject of contract carriages. The Supreme Court held that there is no repugnancy under Article 254 in the instant case and upheld the State law. 

This article will discuss the facts, issues, and laws involved in the case of Vijay Kr. Sharma vs. the State of Karnataka (1990) and the judgement along with its analysis. 

Background of the case

With the introduction of federalism and division of powers along with a Concurrent list that contains subjects on which both the Union and the States have the power to legislate, Article 254 was introduced as a rationalising provision for the same. It was modelled after Section 107 (“Inconsistency between Federal laws and Provincial, or State laws”) of the Government of India Act, 1935 and a further proviso was inserted after the second clause of Article 254 to mitigate the difficulties experienced during that time period involving conflict between provincial and federal laws. It allowed the Parliament to enact any law on the same subject matter as that of a State law. Parliament may through legislation further modify the provisions of the State law or even repeal the same. 

The Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the “Carriages Act”)  was enacted by the State legislature of Karnataka by taking the aid of Entry 42 List III (Acquisition and requisitioning of Property) of the Seventh Schedule and Articles 31 and 39 (b) and 39(c) of the Constitution. The Act provides for the acquisition of contract carriages by the Karnataka State Road Transport Corporation and for other connected matters. It received the assent of the President on 11 March 1976. The Act, 1988 was enacted in 1988 and received presidential assent on 1 July 1989. It replaced the erstwhile 1939 Act on the subject matter.

Facts of the case

The Carriages Act vested exclusive rights over running contract carriage services with the Karnataka State Road Transport Corporation and further denied private operators from applying for fresh permits or for renewal of existing permits. The Union legislation, the Act, 1988 did not contain any such provisions that prohibited private contract carriage services.

The petitioners who operated contract carriages were denied permits under Sections 73, 74 and 80 of the Act, 1988 in view of Section 14 and Section 20 of the Carriages Act. Sections 73 and 74 of the Act, 1988 provide for the application for contract carriage permit and grant of such applications respectively, while Section 80 delineates the procedure for applying for and granting of the permit. None of these provisions impose any bar on private operators. Whereas Section 14 of the Carriages Act prevented any application for fresh permit or for renewal of existing permit from the date of commencement of the Act. 

Section 20 further states that the Karnataka State Road Transport Corporation shall have exclusive rights over running any contract carriages in the State. This repugnancy between the two laws with respect to the role of private operators affected the livelihood of the petitioners.  Consequently, they filed a writ petition under Article 32 questioning the action of the Regional Transport Authority and further contending repugnancy of the provisions of the Carriages Act with respect to the Act, 1988, the latter being a Union law.

Issues raised in the case

• Whether Sections 14 and 20 of the Carriages Act are repugnant to sections 73, 74 and 80 of the Act, 1988 and are therefore impliedly repealed by operation of Article 254?
• Whether the doctrine of pith and substance is applicable to the case at hand? 

Arguments of the parties

Arguments of Petitioner

In order to support their point that Sections 14 and 20 of the Carriages Act were in conflict with Sections 74 and 80(2) of the Act, 1988, the counsel for the petitioners argued that-

• The Act, 1988 enjoined the Regional Transport Authority under the Act not to refuse to grant an application for a permit, however, the afore-mentioned provisions of the Carriages Act, prohibited any person from applying for or any authority from granting any application for running contract carriages in the State of Karnataka.
• Considering the Act, 1988 was later legislation on the same subject matter (under the Concurrent List), it should be deemed to have impliedly repealed the impugned provisions of the Carriages Act, even if the same had attained Presidential assent in view of the proviso to Article 254(2) of the Constitution.
• It was also contended that in a case involving repugnancy under Article 254, the doctrine of pith and substance does not apply. If some of the provisions of the State legislation are repugnant to the Central law, the latter shall prevail, and the repugnant provisions of the State legislation shall be void. 

Their applications under Sections 74 and 80 of the Act, 1988 should, thus, be accepted without reference to the provisions of the Carriages Act which are in direct conflict with the Act, 1988.

Arguments of Respondent

• It was contended that the Carriages Act was enacted in exercise of power under a different entry and was not on the same subject, thereby falling outside the scope of Article 254. 
• The same further being reserved for consideration of the President and consequently having received his assent as per Article 254(2), shall prevail over the Union Act (Act, 1988) in the State of Karnataka.

Laws involved in Vijay Kumar Sharma and others vs. State of Karnataka and others (1990)

Article 254 of the Constitution

This provision clarifies the position when there is an inconsistency between a Union law and a State Law. 

• According to the first clause of Article 254, If any provision of a State law is inconsistent to a Parliamentary law or any other existing law on the same subject matter in the Concurrent list, the Parliamentary law shall prevail and the State law shall be void to the extent its provisions are inconsistent with that of the Parliamentary law. So, if the Union enacts a law related to the acquisition of property under the third list, and a State law enacted later contains certain provisions repugnant to the same, the Union law shall prevail. The State law will not be repudiated in its entirety. Only those provisions that are in conflict with the Union law shall be void. The second clause further provides an exception to this general provision. 
• It states that such a State Law containing provisions repugnant to the Union law, or an existing law with respect to that matter, shall prevail in the state if it has been reserved for the consideration of the President and has received his assent.
• The proviso to the second clause further clarifies nothing shall prevent Parliament from enacting any law with respect to the same matter even if it adds to, amends, repeals or varies the State law.

The present case deals with repugnancy between a Union and State law with respect to a matter in the Concurrent List. While the State law has received presidential assent under Article 254(2), Parliament is well within its scope to enact a new law which modifies the provisions of the earlier State law as contended by the petitioners. The Supreme Court in this case was required to assess whether repugnancy between both the laws indeed existed, and if it did, to what extent. Based on this analysis, it would be concluded which law shall prevail and to what extent the State law shall be void if its provisions were repugnant to the Union law. 

Doctrine of Repugnancy 

As per Black Law’s dictionary, repugnancy refers to an “inconsistency, opposition, or contrariety between two or more clauses of the same deed, contract or statute, or between two or more material allegations of the same pleading or any two writings”. Repugnancy thus refers to an inconsistency between two or more clauses of the same statute or agreement or between provisions of different statutes or writings. In the context of Article 254, repugnancy means a conflict between the provisions of a Union law and that of a State law with respect to any matter in the Concurrent List. The Supreme Court in the case of M. Karunanidhi vs. Union of India (1979) has laid down the following conditions for the doctrine of  repugnancy to be invoked – 

1. Clear and direct inconsistency between Centre and State legislation;
2. Such inconsistency is absolutely irrevocable; and
3. Inconsistency is of such a nature as to bring the two legislations in a direct collision such that it is impossible to obey one without disobeying the other.

Relevant provisions of The Carriages Act, 1976

• Section 4: Vesting of Contract Carriages 

As per Section 4, the contract carriage vesting in the State government shall be deemed to be acquired for a public purpose. 

• Section 14: Prohibition on applications for fresh permits or renewal of existing permits 

Section 14 prohibits any application for a fresh permit or for renewal of an existing permit for running contract carriages in the State and further states that any pending applications for the same shall abate. 

• Section 20: Corporation to have exclusive privilege over running of any contract carriage 

Section 20 vests exclusive power with the Karnataka State Road Transport Corporation for running contract carriage services in the State to the exclusion of any other operators. 

Relevant provisions of the Motor Vehicles Act, 1988

• Section 73: Application for Contract Carriage Permit

Section 73 prescribes the particulars for an application for a contract carriage permit including the type and seating capacity of the vehicle and the area for which the permit is required.

• Section 74: Grant of Contract Carriage Permit

As per Section 74, the Regional Transport Authority may grant a permit on an application made under Section 73 subject to such conditions it may think fit, such as specifying routes or maximum number of passengers or conditions related to handling of goods, fares etc. 

• Section 80: Procedure for applying for and granting permits 

As per Section 80, The Regional Transport Authority shall ordinarily grant permits for running of contract carriages. In case it rejects any such application, it must provide reasons for the same and afford an opportunity to the applicant to be heard. 

Relevant judgements referred to in the case

1. M. Karunanidhi vs. Union of India (1979): The case dealt with the inconsistency between the provisions of the Tamil Nadu Public  Men (Criminal  Misconduct) Act, 1973, State legislation and the provisions of the Code of Criminal Procedure 1898, Prevention of Corruption Act 1947 & Criminal Law (Amendment) Act, 1952 (Union laws). The Supreme Court held that as far as clause 1 of Article 254 is concerned, it clearly lays down that when there is a direct conflict between the provisions of Parliamentary legislation and State legislation on the same subject under the Concurrent list, the latter shall (subject to clause 2) be void to the extent of such repugnancy. Thus, when both the State Act and the Parliamentary Act occupy the same field under the Concurrent List, then the Parliamentary Act being prior in time will prevail over the State Act.
2. Deep Chand vs. State of Uttar Pradesh (1959): The constitutionality of the Uttar Pradesh Transport Service (Development) Act, 1955 and the nationalisation scheme for bus transport in the State of UP was challenged vis-a-vis the provisions of the Motor Vehicles Act, 1939 in the Supreme Court. The case laid down the test to determine repugnancy after referring to its earlier decisions in Tika Ramji v State of UP (1956)  and Saverbhai Amaidas vs. State of Bombay (1954). 

The Supreme Court laid down the following test to determine repugnancy between two statutes: (i) whether there is a direct conflict between the two provisions; (ii) whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (iii) whether the law made by Parliament and the law made by the State Legislature occupy the same field.

3. State of Karnataka & Anr. vs. Shri Ranganatha Reddy & Anr. (1977): The validity of the Karnataka Contract Carriages (Acquisition) Act, 1976 was the subject matter of this decision. A Seven-Judge Bench of the Supreme Court upheld the validity of the statute holding that the same was an ‘acquisition Act’ within the scope of Entry 42 of the Concurrent List. The Court observed that even though it may have had some incidental impact on inter-State trade or commerce it did not suffer from any lacuna on that count. Since the Act had been reserved for Presidential assent, to the extent Section 20 made provisions contrary to those in the Motor Vehicles Act of 1939, it was taken to be valid under Article 254(2) of the Constitution.

Judgement in Vijay Kumar Sharma and others vs. State of Karnataka and others (1990)

The case was heard by a three-judge bench. By a majority of 2:1, J. Misra and J. Sawant upheld the validity of the Karnataka Contract Carriages (Acquisition) Act, 1976 while J. Ramaswamy dissented. J. Misra wrote a separate judgement concurring with the opinion of J. Sawant while J. Ramaswamy wrote a dissenting opinion.

J. Misra’s opinion

There is no direct inconsistency between the Act, 1988 and the Carriages Act. As per Article 254(1) of the Constitution, the conflicting legislation must be on one of the subjects mentioned in the Concurrent List. The State Act i.e., the Carriages Act as under the case, an Act for acquisition came within Entry 42 of List III, whereas, the Parliamentary Ac i.e. the Act, 1988, on the other hand, falling within Entry 35 of List III (mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied). Both the legislations do not fall within the same matter enumerated in the Concurrent List. Even the second clause of Article 254 requires both laws to be related to the same subject matter.

Further, considering that repugnancy occurs if there is direct conflict between both the statutes which have to operate in the same field, the provisions of the Carriages Act are not repugnant to the Act, 1988. The State Act was enacted with the objective of eliminating private operators from the state of Karnataka with regard to contract carriages and by effect bestowing monopoly status on the State Undertaking (Section 20). The Parliamentary Act does not have any such objective for the acquisition of contract carriages which is the foundation of the State legislation. Sections 73 and 74 of the Act, 1988 further do not specify as to who the applicant shall be while laying down how the application shall be made, and the permit shall be granted. While Section 80 of the Act, 1988 does liberalise the granting of permits, Section 20 of the Carriages Act does not run counter to the scheme of the Act, 1988.  

Therefore, there exists no repugnancy between the two legislations and this is not a fit case for invoking Article 254.

J. Sawant’s majority opinion

J. Sawant also concluded that there is no repugnancy between the two legislations, and Article 254 does not apply to the situation at hand.

In order to find out whether State legislation and Parliamentary legislation are allegedly in conflict with one another, the same subject shall be covered, and it is necessary to evaluate the dominant intention of the two legislations. If the subject matters of the two legislations are indeed different, mere connection with some allied subject will not mean that they operate in the same field.  A provision in one legislation in order to give effect to its dominant intention may incidentally be on the same subject as that of the provisions of any other legislation. However, that form of coverage with a different purpose does not mean repugnancy under Article 254. Thus, neither legislation should merely partially cover the same subject matter. 

The subject matter and the purpose of the two legislations involved were substantially different in the present case as well. 

The Carriages Act and the Motor Vehicles Act, 1988 were enacted under different entries in the Concurrent List with different objectives and thus, occupy different fields. The Motor Vehicles Act, 1988was primarily enacted to regulate the operation of motor vehicles. On the other hand, the Carriages Act was enacted not only to prevent private players from operating such vehicles but indeed the very objective behind it was substantially different from that of the Act, 1988. The aim was to nationalise the contract carriage services in order to serve the public interest and provide efficient transport services.

The special provisions of both the old 1939 Motor Vehicles Act and the 1988 Act are pari materia with respect to State undertakings with few changes, the legal consequences of the two schemes being largely similar. Section 98 of the Act, 1988 provides for an overriding effect with respect to Chapter VI of the Act that relates to State undertakings. The Act, 1988 thus, also provides for a route to nationalisation of such contract carriages to the exclusion of private operators in the area so specified. Hence, no such direct conflict exists between the provisions of both the legislations.

He also discussed the Doctrine of Pith and Substance. When the repugnancy between the two statutes is under consideration, the main issue to be examined is whether the State legislation on the subject though otherwise constitutionally valid, becomes void owing to a conflicting parliamentary legislation on the same.  If conflicts between entries in different lists can be reconciled by examining the dominant purpose or pith and substance of the legislation, conflicts regarding repugnancy under Article 254 can be examined on the same anvil as well.  

J. Ramaswamy’s minority opinion

Section 14(1) of the Carriages Act to the extent of prohibition on making fresh applications for grant of permit and Section 20(3) of the Carriages Act which provides for an embargo on the Regional Transport Authority to receive applications of the Carriages Act are void. These are the provisions which have been challenged as violative of the Union law. J. Ramaswamy in his judgement discussed the doctrine of repugnancy and the test to determine repugnancy: 

“The repugnancy to be found is the repugnancy of the provisions of the two laws and not the predominant object of the subject matter of the two laws. The proper test is whether effect can be given to the provisions of both the laws or whether both the laws can stand together. If both the pieces of legislation deal with separate and distinct matters though of cognate and allied character repugnancy does not arise.”

Both Section 14 and Section 20 of the Carriages Act freeze the right of private players to apply for a permit for contract carriage services under the Act, thereby conferring State monopoly over contract carriages. But the intent of the MV Act is to liberalise the same, which is particularly highlighted in Section 80(2) which obliges the Regional Transport Authority not to refuse a grant of permit ordinarily. The Act, 1988 provides the right while the Carriages Act refuses the right to obtain a permit and run contract carriage services and further prohibits the authorities from entertaining applications or granting permits for the same. Thus, two different schemes of provisions are provided under both the Acts which result in inconsistent effects in the same field. Thus, the irreconcilability of the two sets of provisions does exist in this scenario. By operation of the proviso to Article 254(2), the impugned provisions become void.

The State legislature may amend the Central Law to suit their local conditions. They reserve power for the same is provided under Article 254(2). However, till the time the new law is enacted, the same is reserved for the President’s consideration and which if assented by him, the Central law will continue to operate. In this instance, the permits may be obtained as per the scheme of the Act, 1988 and no embargo may be imposed. Parliament may repeal a law by express repeal or by necessary implication. In the instant case, the Union law does expressly repeal the provisions of the State law, however, repugnancy exists.

“The doctrine of pith and substance or the predominant purpose or true nature and character of law is applied to determine whether the impugned legislation is within the legislative 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 doctrine is inapplicable when the entry falls in the Concurrent List and occupies the same field in both the Union and State legislation. Both the Parliament and State Legislature have powers to legislate on subjects falling in the third list. The question of incidental encroachment or true nature and character is thus of no relevance.

Analysis of the case

The case clarified the scope of the doctrine of repugnancy using the dominant purpose test. Since the State Law and the Union Law covered different fields, there was no irreconcilability, and both the State and Union laws could operate in their respective separate fields. However, this demarcation of fields or of the dominant intention of legislation is not as simple.

Different interpretations of the same law could yield different results, indeed different intentions behind the law. While one interpretation could see the state law’s objective as the nationalisation of contract carriages, another reading of the law combined with its historicity could yield another reason that may conflict with the dominant purpose of the Union legislation on the subject. There are no watertight compartments to this doctrine of pith and substance. The nature of two supposedly conflicting laws will be measured on different anvils in different cases and it would perhaps be difficult to follow a uniform approach, particularly, using the litmus test of pith and substance. Other opinions such as in this case could also argue the inapplicability of the doctrine. Further, terms such as incidental encroachment too could carry varied meanings or lend different consequences in different cases.

The doctrine of repugnancy as stated earlier, has an important effect on the federal character of the Constitution. A textual reading of the same provides for a greater edge to Union legislation in case of conflict with a State law. However, as constitutional jurisprudence on the same evolves, State laws may continue to operate with Union laws, even if on the surface, they are apparently contradictory. As this sphere of constitutional interpretation continues to grow, the ambiguities in the application of the doctrine of repugnant and the dominant intention test must be resolved, and due weight must be given to both Union and State laws. 

Conclusion

By a majority of 2:1, the Hon’ble Supreme Court in the case of Vijay Kr. Sharma vs. State of Karnataka held that the provisions of the Carriages Act are not repugnant to the Act, 1988. The doctrine of pith and substance or dominant intention was applied, and it was held that both the purpose as well as the subject matter covered under the case were different in both the Union and State law. Therefore, the touchstone of repugnancy required for the application of Article 254 was not fulfilled and the State law continued to be in operation.

The dissent however highlighted the irreconcilability of both the laws and held some provisions as repugnant. Further, the application of the pith and substance doctrine was ruled out.

However, in effect, considering the majority ruling, in cases of conflict between a Union law and a State law on the same subject or field in the Concurrent List, the doctrine of repugnancy will be applied based on the earlier precedents and in order to ascertain such repugnancy and evaluate legislative competence, the doctrine of pith and substance or dominant purpose of the legislation will be applied. 

Frequently Asked Questions (FAQs)

How can the legislative competence of the Parliament or State Legislatures be determined under the Constitution? 

Article 246 and the three lists under the Seventh Schedule of the Constitution of India help determine the legislative competence of the concerned legislative body and whether the encroachment onto the field of another legislature is merely incidental or significant enough so as to be within the competence of the concerned legislature. 

Whether the doctrine of repugnancy is applicable to List I and List II of the Seventh Schedule (Union and State List)?

The doctrine of repugnancy is only applicable to the third List of the Seventh Schedule, where both the Union and State legislature are competent to enact laws. In the case of List I and List II, the legislative competence of the Parliament and State legislature has been defined exclusively and the subjects listed therein fall within the purview of the respective legislatures. Thus, no concept of repugnancy exists in case of List I and List II.

References

• https://blog.ipleaders.in/doctrine-of-pith-and-substance/; 
• Doctrine of repugnancy (ipleaders.in)
• https://www.scconline.com/blog/post/2023/09/16/evolution-of-the-doctrine-of-repugnancya-perspective-of-the-supreme-court/.