Repugnancy and compensation in transport nationalisation law: prior scheme survived and adequate compensation was upheld

Article examines whether the Uttar Pradesh Transport Services (Development) Act, 1955 and schemes framed under it were displaced by the Motor Vehicles (Amendment) Act, 1956 under Article 254, and whether an already finalised scheme survived. It states that repugnancy would affect the State law only to the extent of inconsistency, that the Central amendment operated prospectively, and that Section 6 of the General Clauses Act preserved acts already done under the earlier scheme. It also addresses compensation under Article 31(2), noting that the Act's permit-cancellation compensation framework, interest, cash payment, and reference to the District Judge were treated as providing adequate compensation.

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Issues: (i) Whether the Uttar Pradesh Transport Services (Development) Act, 1955 and schemes framed under it became void or inoperative on the coming into force of the Motor Vehicles (Amendment) Act, 1956 under Article 254 of the Constitution and, if so, whether the earlier scheme already finalised was saved. (ii) Whether the Uttar Pradesh Act infringed Article 31(2) of the Constitution for want of adequate compensation.

Issue (i): Whether the Uttar Pradesh Transport Services (Development) Act, 1955 and schemes framed under it became void or inoperative on the coming into force of the Motor Vehicles (Amendment) Act, 1956 under Article 254 of the Constitution and, if so, whether the earlier scheme already finalised was saved.

Analysis: The competing enactments occupied the same field in relation to the nationalisation of road transport, but Article 254(1) renders a State law void only to the extent of repugnancy. The Central amendment was construed as operating prospectively for schemes initiated after its commencement and did not require reopening of schemes already framed and completed under the State Act. In any event, if the Central law was treated as repealing the State law, Section 6 of the General Clauses Act, 1897 preserved things duly done under the repealed enactment, including the scheme already framed. The doctrine of eclipse was held inapplicable to a post-Constitution law void for want of legislative power at inception; the earlier scheme therefore remained effective.

Conclusion: The State Act was not wholly void, and the previously framed scheme was saved and continued to operate.

Issue (ii): Whether the Uttar Pradesh Act infringed Article 31(2) of the Constitution for want of adequate compensation.

Analysis: The Act provided a structured compensation scheme for cancellation or curtailment of permits, interest on the amount, payment in cash, and a reference to the District Judge where the amount offered was not acceptable to the permit-holder. Read as a whole, these provisions were treated as an integrated mechanism intended to secure adequate compensation for the interest taken away. The Court held that the legislative scheme was not confined to a nominal or mechanical formula and that the judicial reference under Section 11(5) enabled determination of proper compensation consistent with Article 31(2).

Conclusion: The Act did not offend Article 31(2), because adequate compensation was provided.

Final Conclusion: The challenge to the nationalisation scheme failed on both constitutional grounds, and the appeals were dismissed.

Ratio Decidendi: A post-Constitution law made without constitutional competence is void from inception and cannot be revived by later removal of the impediment, but repugnancy under Article 254 or repeal by a later law does not undo things already duly done under an earlier valid enactment; further, a compensation scheme satisfies Article 31(2) if it provides a real and judicially determinable equivalent for the interest acquired.

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