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Petitioner: AMRITSAR PATHANKOT TRANSPORT CO. LTD., LAHORE VS Respondent: PROVINCE OF PUNJAB, ETC
P L D 1956 (W
P L D 1956 (W. P.) Lahore 900
Before B. Z. Kaikaus, J
THE AMRITSAR PATHANKOT TRANSPORT Co., LTD., LAHORE‑Plaintiff
Versus
(1) THE PROVINCE OF PUNJAB,
(2) THE FEDERA TION OF PAKISTAN AND
(3) THE PUNJAB ROAD TRANSPORT BOARD, LAHORE
Defendants
Civil Original Suits Nos. 10, 40 and 45 of 1955, decided on 21st July 1956.
(a) Motor Vehicles Act (IV of 1939), Ss. 43 (4) (a) and 43‑A (7)‑Delegation of rule‑making powers to Provincial Gov ernment not ultra vires‑Road Transport Board‑Incorporation Of ‑Sufficiently indicated in, and created by S. 43‑A.
Where the Provincial Government had cancelled certain route permits under section 43 (4) (a), Motor Vehicles Act in order to enable the Road Transport Board to use its transport vehicles on the routes rendered vacant by such cancellation, a ground of attack taken by the affected companies against the order of cancellation was that power to frame rules delegated to the Provincial Government with respect to the Road Transport Board under subsection (7) of section 43‑A. was ultra vires and that if the rules were kept out of consideration, provisions of section 43‑A regarding a Road Transport Board were incapable by themselves of bringing into existence a Board at all.
Held, that the delegation of legislative power in sec tion 43‑A was not ultra vires and that the Punjab Transport Board was sufficiently created by the Act even without the help of rules, for the functions of the Board had been specified in section 43‑A.
North Deccan Transport Co., Ltd. v. The State of Bombay (unreported Bombay High Court Case) distinguished.
(b) Government of India Act, 1935, S. 299 (2)--‑"Land" ‑"Commercial undertaking"‑Terms do not cover "route permit" granted under Motor Vehicles Act (IV of 1939)‑Cancellation of route permit under S. 43 (4) (a), Motor Vehicles Act (IV of 1939)‑Compensation not necessary‑No compensation f or deprivation of a public right.
Held, that the right to ply motor vehicles for hire on a specified route under a route permit granted under the Motor Vehicles Act (IV of 1939), is not `land' within the meaning of section 299 of the Government of India Act, 1935.
There is, therefore, no question of paying any compensa tion in a case of cancellation of such permits under the provi sions of section 43 (4) (a), Motor Vehicles Act.
Nor, in such a case, can it be held that the plaintiffs have lost their interest in a commercial undertaking.
An interest in a commercial undertaking has a reference to interest which a person may have in the assets and value as a business of such an undertaking. The mere fact that some restraint has been placed on a person in connection with a certain business would not mean that he has been deprived of his interest in the business.
Held further, that section 299 does not relate to those rights which vest in all members of the public, for instance a right of worship, a right of bathing, a right to use a public garden etc.
In the case of a public right, the condition as to compen sation cannot be fulfilled.
(c) Motor Vehicles Act (IV of 1939), S. 43 (4) (a)--‑Route permit may be cancelled even if Road Transport Board already plying its vehicles on route‑Cancellation not a violation of Art. 12, Constitution of Pakistan.
The intention of the law underlying section 43 (4) (a), Motor Vehicles Act, is to enable the Government to have a kind of monopoly for running vehicles on particular route and the mere fact that the Transport Board was already running its vehicles cannot in any way fetter the powers of the Government to cancel permits.
Cancellation of permits does not in any way violate Article 12 of the Constitution of Pakistan.
(d) Motor Vehicles Act (IV of 1939), S. 43 (4) (a)--- Cancellation of permits by Government‑Suit for injunction does not lie against Government plying its own vehicles instead‑Suit for injunction competent only where there is an existing obligation in favour of plaintiff‑Civil Procedure Code (V of 1908) O. XXXIX, r. 1.
A suit for injunction lies only when there is an obligation existing in favour of the plaintiff. If plaintiffs are entitled to a right of passage on the highway and may even be entitled to carry other persons by virtue of their route permits, it does not mean, that if their permits are cancelled under section 43 (4) (a) Motor Vehicles Act, they have a right to prevent other per sons, including Government, from plying their vehicles except in accordance with law.
Kh. Abdur Rahim and Malik Muhammad Akram for Plaintiffs.
S. A. Mahmood, Assistant Advocate‑General for Defendant No 1.
Nemo for Defendant No. 2.
S. M. Jilani and Muhammad Iqbal Khan for Defendant No. 3.
Dates of hearing: 9th, 10th, 11th, 12th and 13th April 1956.
JUDGMENT
KAIKAUS, J.‑--This judgment will dispose of Civil Original Nos. 10, 40 and 45 of 1955 which involve common questions of law.
The plaintiffs in these three suits are the Amritsar Pathan -kot Transport Co., Ltd., the District Transport Co‑operative Society Ltd., and the National Co‑operative Society, Ltd., respectively. The plaintiffs were operating their buses on the Lahore‑Layallpur via Mangtanwala route. In 1953 a new route called the Lahore‑Layallpur via Shahpur‑Shahkot route was opened and all the three plaintiffs applied for permits to run their buses on the new route. These applications were sub mitted some time in 1953, but they came up for hearing before the Regional Transport Authority in a meeting on the 26th of February 1954 and permits were granted to all the three plaintiffs. The intention was to grant permanent permits as was clarified later, but the permits actually issued were only for a period of one year. The plaintiffs appealed against the permits granted on the ground that they could not be for one year and, by an order of the Appellate Transport Authority, the‑ permits were made permanent which means, in this case, permits for three years. The plaintiffs started running their buses on this route and continued to do so till on the 2nd of April 1954, the Governor of the Punjab, in exercise of the powers conferred by section 43, subsection (4), clause (a), of the Motor Vehicles Act, cancelled the permits of all the plain tiffs on this route. This order had been passed in order that the Punjab Road Transport Board, which had come into exis tence by a notification dated the 21st of August 1951, may operate its own vehicles on this route. The three plaintiffs then filed the present suits challenging the order of the Gover nor and also praying that the Punjab Road Transport Board be prevented from functioning at all either on the Lahore -Layallpur via Mangtanwala route or on the new route.
To explain the grounds of attack on the order of cancellation. it is necessary to refer to the amendment of the Motor Vehicles Act by the Motor Vehicles (Amendment) Act XVII of 1951, read with the amending Act of 1953 which had retros pective effect. The Motor Vehicles Act provides inter alia that any person who wants to ply a motor vehicle on hire on a public place can do so only under a permit from the Regional Transport Authority. The object of the amending Acts was to enable the Government to run its own vehicles through the Road Transport Board and to enable the Government to cancel permits of other persons for this purpose. By these amendments were introduced in the Motor Vehicles Act, sections 43‑A, 43‑B and 43‑C. Section 43‑A provided that if the Provincial Government wants to run its own motor vehicles, it may constitute a Road Transport Board. This Board was granted a corporate capacity so as to be able to acquire property, enter into contracts and sue and be sued. The section provided the constitution of the Board and enacted that the Central Government would own 25% of the share capital of the Board. The section provided further for the framing of the rules with respect to the powers and functions of the Board by the Provincial Government with the concur rence of the Central Government. By section 43‑B, the jurisdiction of the Regional Transport Authority was taken away with respect to the vehicles operated by the Road Transport Board. Section 43‑C gave the Road Transport Board power to acquire such property movable or im movable as was being used for the operation of any motor transport conducted under a permit, subject to payment of compensation. At the same time, the amending Act added to section 43, subsection (4) which gave the Provincial Govern ment the power to cancel any permits in order to enable the Road Transport Board to run its own vehicles on the route or the routes thus vacated. It is an order passed under this provision which is the subject‑matter of the dispute in these suits.
It is proper to mention here that what I have stated above is the effect of the amendments of 1951 and 1953 taken together. The amending Act of 1953 granted the Board a corporate entity with retrospective effect so as to have effect from the date of the amending Act of 1951.
In exercise of the powers conferred by section 43‑A the Punjab Government brought into existence the Punjab Trans port Board and framed rules with respect to its constitution and working: This Board commenced plying its buses on the new route and then in exercise of its powers under section 43 (4) (a), the Punjab Government cancelled the permits of the plaintiffs.
The grounds of attack on the order of the Provincial Government cancelling the permits, as stated in the various plaints, are:‑(1) the amending Act of 1951 is ultra vires in so far as it delegates to the Provincial Government the power to frame rules with respect to the Road Transport Board without providing the policy and framework which are essential for delegation of legislative powers to the executive and without the rules the provisions about the Road Transport Board are incapable of bringing into existence a Board at all ; (2) Section 43 (4) (a) is opposed to the provisions of section 299 of the Government of India Act as it enables the Government to take away a permit, which is a right of property, without pro viding compensation ; (3) even if section 43 (4) (a) is intra vires, the cancellation is in excess of the power granted, for the power is intended only for creating a vacancy for the Road Transport Board and the Board was already operating its buses on this route; and (4) the amendment violates Article 12 of the Pakistan Constitution.
The case of the plaintiffs with respect to the second relief claimed (that the Punjab Road Transport Board should not ply its vehicles) is that the Board has no legal existence because (1) the delegation of legislative functions, that is, the rule‑making power, is ultra vires, and the provision in the Act itself is insufficient for the creation of a Board; (2) The rules framed by the Provincial Government under the Act are void as they have not been framed by the proper rule‑making authority with the concurrence of Central Government, and section 133 of the Motor Vehicles Act has been violated; and (3) Section 43 (4) (a) being ultra vires on account of sec tion 299, Government of India Act, the whole amendment is ultra vires and the provisions relating to the Board cannot be given effect to.
The defendants to these three suits are the Punjab Pro vince, the Federation of Pakistan and the Punjab Road Transport Board. The Federation of Pakistan has not felt interested. The other two defendants have filed written statements. They deny that the orders are invalid or that the Punjab Road Transport Board can be restrained from plying its vehicles. Some preliminary objections which had been raised were disposed of by me after framing preliminary issues. The issues framed on the merits are:‑
(1) Whether the order of the Punjab Government, cancel ling the four permits of the plaintiffs on the Lahore‑Layallpur via Sheikhupura and Shahkot route, is void for reasons stated in paragraph 9 of the plaint?
(2) Whether the plaintiffs can be granted an injunction as claimed in view of the cause of action as disclosed in the plaint?
(3) Whether the circumstances of the case are such that the discretion of the Court to grant an injunction should be exercised in favour of the plaintiffs?
The first question to be considered is whether the amend ment is void because legislative 0power has been delegated without providing sufficient frame‑work within which rules are to be framed. Before proceeding to consider the arguments, it will be convenient to reproduce here sections 43 (4) (a), 43‑A, 43‑B and 43‑C:‑
43 (4) (a) Notwithstanding anything in the foregoing subsections, the Provincial Government may by a notifica tion under this subsection,
(a) cancel generally or in relation to a specified area any permit or class of permits granted under this Chapter in respect of transport vehicle in order to enable the Road Transport Board to use its transport vehicles on the routes thus rendered vacant.
43‑A. (1) Where a Provincial Government decides to operate transport services itself, it shall constitute a Road Transport Board.
(2) The Board shall consist of seven members of whom four including the Chairman shall be appointed by the Provincial Government and three by Central Government.
(3) Members of the Board shall hold office for such period as may be specified in the order appointing them, but not withstanding the foregoing provision any member may resign or may be removed at any time or may be re‑appointed, by the appointing authority.
(4) The Provincial Government shall consult the Board in all matters relating to the co‑ordination of road and rail transport and in the fixation of fares and freights under this Chapter.
(5) The Road Transport Board shall reserve for and allot to the Central Government, as represented by the railways, not less than 25010 of its total share capital.
(6) If a dispute arises between the Central Government and a Provincial Government in respect of any matter con cerning the fixation of fares and freights, and to settlement is arrived at by negotiation, the dispute shall be referred to the arbitration of the Chief Justice of the Federal Court or of a judge of the Federal Court nominated by him and the award of the Chief Justice or of a judge aforesaid shall be final and binding on the parties and shall not be called in question in any Court of law nor shall anything in the Arbit ration Act, 1940, apply to such arbitration.
(7) The Provincial Government shall make rules, with the previous concurrence of the Central Government and not inconsistently with this Act, prescribing the powers and functions of the Board.
43‑B. (1) The Road Transport Board may operate motor transport on any route it may think fit and where it so operates such transport, the Provincial Transport Authority and the Regional Transport Authority shall, notwithstand ing anything in this Act, have no jurisdiction in relation to that transport.
(2) Where the Provincial Government has cancelled any permit or class of permits under clause (iii) of subsection (1) of section 43, the Provincial Transport Authority and the Regional Transport Authority shall, notwithstanding any thing in this Act, have no jurisdiction in respect of such permit or class of permits.
43‑C. (1) The Road Transport Board shall have power to acquire any property movable or immovable used in, or for, or ancillary to, the operation of any motor conducted under a permit granted under this Chapter.
(2) Such acquisition may be made by serving a notice of acquisition on the owner of the property, or if such owner is not readily traceable or the ownership is in dispute, by a notice of acquisition published in the official Gazette of the Province, and shall take effect from the beginning of the day, on which the notice is served or published.
(3) For any property so acquired there shall be paid com pensation equivalent to the market value of the property acquired to be calculated in such manner as the Provincial Government may prescribe.
(4) If any dispute arises as to the amount of compensa tion payable under subsection (3) it shall be referred to the arbitration of a person who is or has been a High Court Judge and his award shall be final and binding on the parties and shall not be called in question in any Court of law nor shall anything in the Arbitration Act, 1940, apply to the arbitration.
The argument of Mr. Abdur Rahim on this point is that the provision in the Act regarding the creation of a Board is too brief and the Legislature has left material elements needed for the creation of the Board to the rule‑making authority. Section 43‑A he urges simply says that there shall be a Road Transport Board consisting of seven members to be appointed by the Central and the Provincial Governments who shall hold office for such period as the Government may think fit and may be removed by the appointing authority. It then goes on to provide that 250% of the total share capital shall be allowed to the Central Government and then there is a provision for arbitration between the Central and the Provincial Govern ments, and that is all. Learned counsel refers to similar enactments wherein, he says, much greater details of the corporation and its functions have been provided. He refers to the Pakistan Development Corporation Act, 1953, which provides for the share capital, the management through a board of directors, appointment of directors and the chairman, disqualifications of directors, appointment of officers and various other matters. Similar provisions there are in the National Bank of Pakistan Ordinance, which contains detailed directions as to share capital, qualifications of shareholders, management, qualifications and disqualifications of directors, terms of office of members, meetings, business to be transacted and so on. Learned counsel says it is a well‑established principle of delegation of legislative powers to the executive that the legislature should provide a framework the details of which may be supplied by the executive. Considering, he says, that the legislation is under entry 33 in the Federal List which relates to "incorporation, regulation and winding‑up of trading corporations" the framework is wanting. The legislature has not itself regulated the incorporation but has left it entirely to the Provincial Government to do it by means of rules.
I have asked learned counsel to point out to me what those provisions are which according to him should have been incorporated in this Act in order that a sufficient framework may have been provided to validate the delegation of legisla tive powers and the weakness of his argument will be apparent from his reply. Learned counsel is able to refer only to the four following matters as those which, in his opinion, should have been included:‑(1) A provision as to wherefrom the finances are to come. (2) Some provisions as to management, that is, the manner in which the Board is to function. (3) Qualifications and disqualifications of the members of the Board. (4) Some kind of control to be exercised by the Federal Legislature over the functions of the Board.
Learned counsel is unable to refer to any authority according to which the provisions with respect to these matters are necessary in an Act relating to corporations to enable the delegation of legislative powers to the executive Government, except to Cooleys Constitutional Limitations, pages 226 and 227, where it is said: "Terms and conditions upon which a corporation may be created, the powers and capital stock they may have, the purpose for which they may increase their capital stock and the conditions and limitations thereof are exclusively matters of legislative actions which cannot be delegated." The case on which this extract from Cooleys book is based is State v. Great North‑Western Railway‑an American case the report of which is not available. It is not known what exactly were the particular terms, conditions, and powers which are referred to in this extract. The question whether a sufficient framework for the purpose of delegation has been provided is a matter to be decided according to the circumstances of each case and it is difficult to lay down precise rules. I will, therefore, consider the alleged omissions one by one. The first omission, according to learned counsel, is the absence of reference to finances. It is incorrect to say that a reference is absent. It is provided in the section that if the Provincial Government wants to run its own vehicles, it shall constitute a Road Transport Board. It is obvious that it is the Provincial Government which is to function through a Road Transport Board. There is a provision at the same time that not less than 25% of the share capital is to be allotted to the Central Government as represented by the railways. That obviously means that the share capital is to be divided between the Central Government and the Provincial Govern ment. Subsection (6) which provides for arbitration between the Central Government and the Provincial Government also points to the same conclusion. Although section 43‑A does not expressly say so, it is quite clear that the share capital is to be owned by the Central Government and the Provincial Government, I do not see what difference it would have made had the section provided in express words that the share capital shall be provided by the Provincial and the Central Governments.
The second alleged omission is as to the absence of provi sion regarding management and manner in which the Board is to function. I do not see what provision about management is needed in the Act. It is obvious that the Board is to run the transport and so far as procedure in voting and passing of resolutions is concerned, it could hardly be urged that that is a matter which cannot be provided for in the rules. The third of objection relates to qualifications and disqualifications of the members of the Board and here too learned counsel is unable to cite any authority that the qualifications and disqualification cannot be left to the same authority as is to appoint the members of a body. There is no legal objection to the legis lature merely saying that the Provincial (or Central) Govern ment shall appoint such persons, as it thinks fit. There would be no need for prescribing qualifications in the rules at all. It is necessarily implied in the power of appointment given to the Governments that the qualifications shall be such as the Central Government and the Provincial Government may think proper. The last objection is as to there being no control by the Federal Legislature. Learned counsel is unable to state any principle on which it is necessary that there should be such a provision or to quoted any authority in support of his objection.
One way of looking at the matter is this. Suppose there was no rule‑making power conferred by section 43‑A at all or no rules had been framed, then, taking into account only the Act, is there not a sufficient provision for the creation of a Road Transport Board? If the legislative powers be not properly delegated, the only result would be that the rules framed would be invalid. Mere absence of any valid rules cannot invalidate the provisions of Act, which is within legislative competence unless it could be shown that the provisions regarding incorporation are legally inadequate for bringing into existence a Transport Board at all. I am directly concerned in this case only with the validity of the order under section 43 (4) (a). That order is being impeached on the ground that section 43 (4) (a) warrants cancellation only for the assistance of the Transport Board and the Board has not properly assumed an existence at all. If there be a Road Transport Board in existence, the order of the Provincial Government, cancelling the permits of the plaintiffs enabling the Road Transport Board to function freely, would be valid. It is impossible to say in respect of section 43‑A that it is not capable of bringing into existence a proper legal entity.
Great reliance has been placed on behalf of the plaintiff's on an unreported judgment of the Bombay High Court in the North Deccan Transport Co., Ltd. v. The State of Bombay. In that case it was urged on behalf of the petitioners that the Indian Act 32 of 1948, the Road Transportation Corporations Act, which contains provisions similar to the provisions of our amending Act of 1951, was ultra vires Section 3 of that Act runs as follows:---
3. (1) Notwithstanding anything contained in the Motor Vehicles Act, 1939, the Indian Companies Act, 1913, or any other law, a Provincial Government, having regard to
(a) the advantages offered to the public, trade and industry by the development of road transport ;
(b) the desirability of co‑ordinating any form or road transport with any other form of transport;
(c) the desirability of extending and improving the facili ties for road transport in…
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