The Supreme Court has held that the Legislature, within constitutional limits, has the authority to repeal any law it enacts.

Emphasizing that the power to legislate inherently includes the power to repeal, the Court clarified that legislative bodies can modify or nullify statutes as policy considerations evolve over time.

A bench comprising Justices Vikram Nath and Prasanna B. Varale ruled that the Supreme Court’s prior affirmation of a statute’s constitutional validity at the time of its enactment does not preclude the Legislature from repealing or amending the statute when warranted by policy changes.

"The power to repeal a law is coextensive with the power to enact it. A repeal statute does not create a new legal framework but rather extinguishes the provisions of the earlier Act. It does not require fresh assent unless the repeal falls outside the legislative competence of the State," the bench stated.

The Court upheld the constitutional validity of Karnataka’s 2003 law repealing the Karnataka Contract Carriages (Acquisition) Act, 1976. The repealed Act was originally enacted to acquire privately operated contract carriages and place them under the control of the Karnataka State Road Transport Corporation (KSRTC) to regulate their operation.

Section 3 of the Karnataka Motor Vehicles Taxation and Certain Other Law (Amendment) Act, 2003, which repeals the 1976 law, was found to be constitutionally valid. The bench ruled that the State Legislature had rightly exercised its power to repeal the Act, dismissing contentions that the repeal amounted to an impermissible overruling of prior Supreme Court judgments or required fresh presidential assent.

Rejecting KSRTC’s argument that repealing the KCCA Act contradicted earlier Supreme Court rulings upholding its validity, the bench observed, "Those decisions merely affirmed the Act’s constitutional validity at the time of enactment and do not bind the Legislature from modifying or repealing a statute when policy changes necessitate it."

Addressing the argument that fresh presidential assent was required, the Court clarified that a repeal statute merely extinguishes an Act’s operative provisions and does not create a new law, thereby not necessitating new assent, provided the repeal falls within the Legislature’s competence.

The Court held that the repeal was a deliberate policy decision aimed at modernizing Karnataka’s transport framework rather than an attempt to undermine judicial precedent. The decision sought to introduce a more dynamic and competitive transport sector by dismantling KSRTC’s monopoly, responding to contemporary challenges such as rising public transport demands, urban congestion, and the need for efficient service delivery.

Additionally, the Court ruled that the Secretary of the State Transport Authority is empowered to grant non-stage carriage permits, including contract, special, tourist, and temporary permits, under Section 68(5) of the Motor Vehicles Act and Rule 56(1)(d) of the Karnataka Motor Vehicles Rules. It upheld the delegation of quasi-judicial functions, provided the enabling statute allows it.

"The State Transport Authority (STA) has the power to delegate its functions under Section 68(5) of the MV Act, as explicitly provided by law. This delegation is a rational administrative measure ensuring efficient processing of permit applications while maintaining oversight," the bench stated.

Dismissing an appeal by KSRTC against the Karnataka High Court’s March 28, 2011, judgment, the Supreme Court concluded that the repeal was backed by a well-defined legislative objective to address inefficiencies and liberalize the transport sector.

While agreeing with the High Court’s ruling that the Repeal Act was in line with modern transport policy, the Supreme Court overturned its conclusion that permit-granting powers could not be delegated to the Secretary, State Transport Authority.

Criticizing the High Court’s reasoning on non-delegability, the bench remarked, "Preventing delegation would overburden the STA with routine tasks, causing unnecessary delays and inefficiencies in issuing permits. The Legislature clearly aimed to enhance transport services by liberalizing the regulatory framework, making delegation both legally permissible and practically necessary."

The Court emphasized that legislative history and the Statement of Objects and Reasons of the 2003 Repeal Act underscored the intent to introduce competition into the transport sector, ensuring efficient and accessible public transport services in Karnataka.

Case Title: M/s S R S Travels By Its Proprietor K T Rajashekar Vs The Karnataka State Road Transport Corporation Workers & Ors