STATE OF KARNATAKA AND ANR ETC. versus SHRI RANGANATHA REDDY & ANR. ETC.

Citation: [1978] 1 S.C.R. 641 · Decided: 11-10-1977 · Supreme Court of India · Bench: M. HAMEEDULLAH BEG · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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STATE OF KARNATAKA AND ANR ETC. 
v. 
SHRI RANGANATHA REDDY & ANR. ETC. 
October. 11. 1977 
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[M. H. BEG, C.J., Y. V. CHANDRACHUD, P. N. BHAGWATI, V. R. 
KUISHNA IYER, N. L. UNTWALIA, JASWANT SINGH AND 
P. S. KAILASAM, JJ.] 
Constitution of .Irulid; -Article-31(2)-"Public purpose" Scope of, whether 
includes compulsory acquisition for Road Transport Corporation-Part acqui· 
sition pf undertaking, validity of-"Amount" in lieu of acquired property. quan· 
tum and principles of evaluation, ·whether questionable under Art. -31(2). 
A 
B 
Karnataka Contract Carriages, (Acquisition) Act, 1976, vis-a-vis Constilution -
C 
of India, Articles 31(2) and 39(b) and (c) and_ Schedule List 1 Entry 42-
iVhethPr on acquisition the State Govt. can transfer counter signed portions of 
Inter-State pern1its td Road Transport Corporation-S.4(3)y "deemed", l,:/ietlier 
introduce~ legal fiction--S.6(1), fixation of amount 
by- arbitrator 
S. 
6(1) 
Schedule, Para 1(1). Explanation-Interpretation of "acquisition cost". 
The Karnataka State Ro.id Tr.trisPort Corporation published in the Karnataka 
Gazette dated ~lay 16, .1974 a draft scheme for nationalisation of 
contract· 
carria~es in the State. under Chapter IV-A of the ~lotor Vehicles Act. 1939. 
Objections were preferred by some of the respondents, but the State Govem· 
ment and the Corporation dropped the idea of proceedin~ with the scheme 
\vithout concluding the hearing. Later, on January 30, 1976 the State Govern· 
n1ent pro!llulgatcd an ordinance followed by a number of notifications by which 
all contract carriages operating in Kamataka, and the permits specified in the 
notifications, vested in the State. Under Clause 20( 1) of the Ordinance. the 
State Government transferred them to the Corporation which seized the vehicles 
and the relative permits. The High 'Court stayed the seizure of six vehicles 
operating under lnL!r-State permits. and quashed some of the notifications, hold· 
ing that the ordinance did not empower the acquisition of the vehicles 
not 
covered by valid contract permits. The ordinance was replaced by the Karna- · 
taka contract carriages (.\.cquisition) Act,· 1976, published in the Karnataka 
Gazette dated l\larch 12. 1976. The Act was made effective retrospectively 
from January 30, 1976, and everything done under the Ordinance was deemed 
to have been done' under the Act. 
\Vrit Petitions \Vere filed by various contract 
carriage operators. fin."l.r..ciers and others including those who had successfully 
· filed the earlier \Vrit Petitions. The High Court allowed the writ petitions, 
struck. down. the Act as unconstitutional, and quashed the notifications. 
(Judg· 
n1ent reported in K. Jayaraj Balla! and Ors. v. State of JCarnatakd 
anti Ors .• 
I.LR. Karnataka 1976. Vol. 26, P. 1478). 
Allo\loir..g the app.ea!<J anr.l upholding the constitutional validity of the Act on 
merits, the Court 
HELD : Per UntwaEa. J. (Also on behalf of M. H. Beg. 
C.J., V. Y. 
Chandrachud, and P. S. Kailasam, JJ.) 
1. whether the law of ocquisition is for public purpose or not has to be 
i;:athered mainly from th.e statement of Objects and Reasons of the Act and 
its preamble. The matter has to be examined v.·ith reference to the various 
provisions of the Act. it'i context and set up and then it has to be judged 
'vhether the acqui5itio:i is for a public purpose , .... ithin the meaning of Article 
3 t (2) and the law t:""roviJin_g ror such acquisition v.·hile establishin.!?: a 
Road 
. Transport· Corporation. L.'1.e State Government is obliged to keep in mind prima-
rily the public interest. The acquisition for the purpose of the Corporation 
\\·os, therefore. in pubt:c interest. [64_8 C--E] 
fl. JI. Keshavanand.i Bharati Sripadagalai·aru ,._ 
State of Kera/a (1973] 
Suppl. S.C.R. I, Aprlie-1 . 
D 
E 
F 
H 
B 
c 
D 
E 
F 
G 
H 
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642 
~r, '_,..--:· -~ 
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SUPRE].lE COURT REPORTS 
Thi? court observed : 
[1978] 1 s.c.R. 
There may be many circumstances and,facts to justify the acqui.sition. of 
even a movable property for a public purpose. _ A particular commercial activity 
of tl1e State may itself be for a public purpos~. In a larger se_nse one can say 
that augmentation of the coffers of the State is also for a. pubhc purpose: Ac-
quisition of property eitber·movable or immovable,-may in such a situation be 
for a public purpose. [651 ~D] _ 
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\ 
The State of Bihar v. Maliarajadhiraja Sir Kameshwar. Singh of_ Darbhangff 
lltul Ors.- [1952]-SCR 889, referre
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