Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: Sh. AKBAR HUSSAIN And Other VS Respondent: PUNJAB GOVERNMENT And Others
Court Name: Lahore High Court Judge(s): Akhtar Hassan, C.A. Rahman Title: Sh. AKBAR HUSSAIN And Other vs PUNJAB GOVERNMENT And Others Case No.: Intra-Court Appeal No. 35 of 1986 Date of Judgment:1986-05-28 Reported As: 1987 PLC (C.S.) 21 Result: Appeal allowed
JUDGMENT
JUDGMENT C.A. RAHMAN, J.--The present I.C.A. (No. 35 of 1986) and I.C.A. Nos. 36, 42, 50 and 51 of 1986 are directed against judgment, dated 14-1-1986 passed by the Single Judge of this Court whereby appellants' writ petitions challenging Notification No. TR-II/10-203/84 dated 9-5-1985 issued under section 20 of the Punjab General Clauses Act, 1956 dissolving the Punjab Road Transport Board and all subsequent Circulars, Notifications/ Orders issued by the Provincial Government and the Administrator of the defunct-Punjab Road Transport Board Employees Surplus Pool as being illegal, void and without lawful authority were dismissed. 2. Briefly stated, the facts giving rise to these appeals are that Sh. Akbar Hussain appellant in I . C . A . No. 35 and Ch. Sanaullah appellant in I . C . A . No. 36 were holding the posts of Accounts Officers while Syed Muhammad Munir Gilani appellant in I . C . A . No. 42 and Syed Ghulam Mustafa appellant in I. C. A. No. 51 were working as Director (Stores) and Assistant Director (Labour Welfare) respectively under the Punjab Road Transport Board when on 9-5-1985 Notification No. TR-II /10- 203/84 was issued by the Governor of the Punjab under section 20 of the Punjab General Clauses Act, 1956 (hereinafter to be referred to as W.P. Act VI of 1956), dissolving the Punjab Road Transport Board. Fayyaz Ahmad appellant in I. C. A. No. 50 was working as Senior Medical Officer of the Punjab Road Transport Board at the time of its dissolution. According to the notification, all officers and employees of the Board were to be placed in the surplus pool maintained by the Provincial Government for the purpose of payment of pay last drawn by them till their adjustment in other organizations, or their services were dispensed with in terms and conditions of services applicable to them prior to the dissolution of the Board. On 12-5-1985, another Notification No. TR-II/IC 203/84 was issued whereby the officers and employees of the defunct-Punjab Road Transport Board were
---
## Page 2
placed in surplus pool under the operational control of the Managing Director, Punjab Urban Transport Corporation. On 17-7-1985. Mr. Muhammad Afzal Kahut, Managing Director of the Punjab Road Transport Corporation was appointed as Administrator of the Punjab Road Transport Board Surplus Employees pool. Vide Notification No. TR-11/10-203/84. He was empowered to exercise powers as Government, Punjab Road Transport Board or as Chairman or Managing Director Punjab Road Transport Board, as the case may be, in accordance with the principles contained in various rules applicable to the employees of the Board. By exercising the power conferred under the aforementioned notification, the Administrator modified the rules applicable to the employees of the Board vide order, dated 25-8-1985. On 12-9-1985, the Administrator purporting to act under Rule 7(7) of the Punjab Road Transport Rules, 1972, passed order retiring Sh. Akbar Hussain appellant from service. Through a similar order passed on 12-9-1985, Ch. Sanaullah appellant was also retired from service. On 15-5-1985, Munir Ahmad Gilani appellant was forbidden from attending the office and was directed to surrender the staff car and official telephone installed at his residence by an order passed by the Administrator. On 14-9-1985, Munir Ahmad Gilani appellant was retired from service on attaining the age of superannuation by the order of the Administrator purporting to have been passed under Rule 33.1 of the Punjab Road Transport Service Rules, 1959. Ghulam Mustafa Shah appellant was ordered not to attend the office w.e.f. 18-5-1985 through an order passed by the Administrator. On 31-8-1985 he was retired from service on having completed twenty-five years of service by an order purporting to have been made under Rule 33.2 of the Punjab Road Transport Board Service Rules, 1959 by the Administrator. Dr. Fayyaz Ahmad appellant, who was also placed in the surplus pool was ordered by the Administrator not to attend the office w.e.f. 18-5-1985. He was also required to surrender official telephone. On 31-8-1985 his appointment was terminated by the Administrator in terms of clause (II) of his appointment letter, dated 30-10- 1983 as he was still on probation. 3. The appellants filed writ petitions challenging Notification No. TR-II/10-203/84, dated 9-5-1985 issued by the Governor of the Punjab whereby the Punjab Road Transport Board was dissolved. They also assailed the consequential notifications and orders issued by the Governor of the Punjab and Mr. Muhammad Afzal Kahut as Administrator of the surplus pool of the employees of the defunct-Board. The appellant's contention was that the Punjab Road Transport Board was statutory body established under section 70 of the Motor Vehicles Ordinance, 1965 and as such it could not be dissolved in the absence of statutory provisions conferring power of dissolution. Section 20 of W.P. Act VI of 1956 could not be pressed into service for dissolving the Board particularly when the dissolution of the Board adversely affected the legal rights of its employees. According to the appellants, orders passed by the Administrator of the surplus pool of the employees of the defunct---Board affecting the appellants' rights as employees of the Board, were illegal and without lawful authority. 4. The writ petitions were contested on behalf of the Provincial Government and the Administrator of the surplus pool of the employees of the Punjab Road Transport Board and it was pleaded that the Punjab Road Transport Board could be legally dissolved by exercising power conferred by section 20 of the W.P. Act VI of 1956 and the Administrator of the surplus pool of the employees of the defunct-Board had in exercise of the legal authority conferred on him by the Governor acted lawfully and passed the impugned orders in accordance with law. 5. After hearing the learned counsel for the parties, the learned Single Judge came to the conclusion that the Governor was legally competent of dissolve the Punjab Road Transport Board which had been established through a notification, by having recourse to the provisions of section 20 of W.P. Act VI of 1956. It was further observed that the appellants had no legal right to challenge the orders passed by the Administrator in relation to their employment under the Punjab Road Transport Board because with the dissolution of the Board, their services could be dispensed with
---
## Page 3
as far as possible in accordance with the terms and conditions admissible to them prior to the dissolution of the Board and the Administrator had acted within lawful authority conferred on him by the Governor. 6. The crucial point requiring determination in all these appeals is regarding the authority of the Governor to dissolve the Punjab Road Transport Board which was established under section 70 of the Motor Vehicles Ordinance, 1965 (hereinafter to be referred as the Ordinance). The appellants' contention is that in the absence of specific provisions empowering the Governor to dissolve the Board established under the Ordinance, the provisions of section 20 of W.P. Act VI of 1956 do not empower the Governor to dissolve the Board. It has been pointed out that the impugned notification, dated 9-5-1985 supersedes notification No. TR(SOII)6-175, dated 16-7-1975 by invoking the provisions of section 20 of W.P. Act VI of 1956. The last mentioned notification is to be construed to have been issued under subsection (2) of section 70 of the Ordinance as through this notification Chairman and members of the Board were appointed for a term of two years. The establishment of a Board for the purpose of operating road transport services is provided in subsection (1) of section 70 of the Ordinance. According to learned counsel for the appellants, the existence of the Board established under subsection (1) of section 70 of the Ordinance is not affected by supersession of notification whereby the Chairman and the members of the Boards were appointed. Notification, dated 9-5-1985 has merely affected composition of the Board and not its existence. The Punjab Road Transport Board established under section 70(1) of the Ordinance is a body corporate and has perpetual succession which means the continuous existence of the Board has been ensured by the statute itself so as to enable it to manage its affairs and hold property. Learned counsel for the appellants has referred to the meaning of 'perpetual' given in Black's Law Dictionary, Third Edition as 'never ceasing; continuous; enduring; lasting; unlimited in respect of time; continuing without intermission or interval'. In the same Dictionary term 'perpetual succession' has been interpreted. That continuous existence which enables a corporation to manage its affairs, and hold property without the necessity of perpetual conveyances, for the purpose of transmitting it. By reason of this quality, this ideal and artificial person remains, in its legal entity and personality, the same, though frequent changes may be made of its members. Pointing out the characteristics of a corporation given in paragraph 1208 of the Halsbury's Law of England, Volume 9, Fourth Edition, learned counsel for the appellants have referred to the passage from the law of Corporation that 'an essential element in the legal conception of a corporation is that its identity is continuous. That is that the original member or members and his or their successors are one." 7. Learned counsel appearing on behalf of the respondents, after briefly stating the history of establishment of the Road Transport Board, has argued that it is no better than a Corporation aggregate which according to the definition given in paragraph 1204 of Halsbury's Law of England, Volume 9 (Fourth Edition) is a collection of individuals united into one body under a special domination. A corporation aggregate comes to an end when the members cease to be its members. Referring to paragraph 1395 of the same book, learned counsel has relied on the passage: "So when an integral part of a corporation is gone, without whose existence the functions of the corporation cannot be exercised, and the corporation has no means of supplying that integral part, the corporation is dissolved, at least for certain purposes, and the Crown may revive all the rights which the corporation had and attach them to a new corporation." According to the learned counsel, the term 'perpetual succession' used in section 70(1) of the Ordinance does not mean that the Board once established by the Government is to continue for ever. In Monogram 83 under the heading, GENERALLY: in American Jurisprudence, Volume 13, at page 226, it has been stated "A corporation the charter of which does not limit its existence to a definite period of time continues, as a general rule, in legal contemplation for the time prescribed by a general statute
---
## Page 4
applicable to the category to which it belongs or until it has been dissolved by some prescribed method. On the other hand, a corporation, though unlimited in duration by its charter and though given the capacity of perpetual succession, cannot be regarded as 'everlasting' within the general and common meaning of that word. It may be dissolved and cease to exist for want of members by voluntary surrender of franchises, by forfeiture, by misuser, etc. 8. Referring to the meaning of phrase 'perpetual succession' given in Monogram 84 in the aforementioned book, learned counsel for the respondents has relied on the statement 'As a general rule, the words 'perpetual succession' as used in charters, often in connection .With a further provision limiting the period of corporate existence to a certain number of years, means nothing more than that the corporation shall have continuous and uninterrupted succession so long as it shall continue to exist as a corporation, and are not intended to define its duration." 'Learned counsel for the respondents has referred to the previous notifications issued by the Governor of the Punjab under section 70 of the Ordinance whereby the term of the Punjab Road Transport Board was extended from time to time which according to the learned counsel clearly indicated that the Board was not a permanent body and the term 'perpetual succession' used in subsection (1) of section 70 of the Ordinance in relation to the Board, would not make it an everlasting body. In this connection he has referred to Corpus Juris, Volume XIV-A where at page 1099, phrase 'perpetual succession' has been explained as "where the life of a corporation is limited by law to a fixed period, it is legally dead at the expiration of the statutory period, notwithstanding the fact that the charter provides that it shall have 'perpetual succession' since this means merely continuous succession during the period for which it is created". 9. For resolving the controversy as to whether the Road Transport Boards established by the Provincial Government firstly, under the Motor Vehicles Act, 1939 (Act IV of 1939) and after its repeal, under the Ordinance, are permanent bodies, it is necessary to consider the legislative history of creation /establishment of these bodies. 10. The question of the coordination of road and railway and the method by which the object could be secured consistently with the public interest was considered by the Government of India as early as 1933. In the same year the Road Rail Conference convened by the Government passed resolution inter alia recommending the control of public service and goods motor transport. Two years later, the first Transport Advisory Council made definite recommendations to the same effect. In 1936 a bill was introduced to amend the Indian Motor Vehicles Act, 1914. Later on, Government decided to present a more comprehensive bill. The bill after certain amendments was enacted as Act No. IV of 1939 and was known as Motor Vehicles Act, 1939. It dealt with licensing of drivers of motor vehicles, registration of motor vehicles, control of transport vehicles, constructions, equipments and maintenance of motor vehicles, and insurance of motor vehicles against third party risks etc. Sections 42 and 43 of the Act, which are relevant for our purpose gave power to the Provincial Government to control road transport. It inter alia provided for the issuance of permit by a Regional or Provincial Transport Authority authorising the use of the vehicle in any public place subject to certain conditions and also conferred powers on the Provincial Government to control road transport by prohibiting or restricting throughout the Province or in any area or on any route within the Province the conveying of long distance goods traffic generally or of prescribed classes of goods by private or pu. Is carriers. Provincial Government could also fix maximum or minimum fares or freights for stage carriages and public carriers to be applicable in the Province. Soon after the independence of the country, the West Punjab Government enacted the West Punjab Road Transport Act, 1948 which a view to establishing West Punjab Road Transport Board for carrying goods and passengers by road from any place in West Punjab to any other place whether in West Punjab or elsewhere. The Act received the assent of the Governor-General on 28-6-1950 and it was to come into force on such day as the Government might by notification in the official Gazette
---
## Page 5
appoint in that behalf. Following the decision of the West Punjab Government to establish a Road Transport Board in the Province, the Central Government carried out certain amendments in the Motor Vehicles Act, 1939, by means of Motor Vehicles (Amendment) Act, 1951 (Act XVII of 1951). Through this Act, the following new sections 43-A, 43-B and 43-C were inserted after section 43 of the Motor Vehicles Act, 1939:- "43-A.Road Transport Board.--(1) Where a Provincial Government decides to operate transport services 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 the Central Government. (3) Members of the Board shall hold office for such period, as may be specified in the order appointing them, but notwithstanding 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 25% of its total share capital. (6) If a dispute arises between the Central Government and a Provincial Government in respect of any matter concerning the fixation of fares and freights, and no 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 Judge aforesaid shall be final and binding on the parties shall not be called in question in any Court of law nor shall anything in the Arbitration Act, 1940, apply to such arbitration. (7) The Provincial Government shall make with rules, with the previous concurrence of the Central Government and not inconsistent with the Act, prescribing powers and functions of the Board. 43-B.Jurisdiction of Transport Authorities Barred.--(1) The Road Transport Board may operate motor on any route it May think fit and where it so operates such transport, the Provincial Transport Authority and the Regional Transport Authority shall, notwithstanding anything in this Act, have no jurisdiction to that transport. (2) Where the Provincial Transport Board had cancelled any permit or class of permits under clause (i.e) of subsection (1) of section 43, the Provincial Transport Authority and the Regional Transport Authority shall, notwithstanding anything in this Act, have no jurisdiction in respect of such permit or class of permits. 43-C. Road Transport Board to have power to acquire property of Road Transport Operators.(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 transport 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 compensation 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 to the amount of compensation 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.
---
## Page 6
11. After the above amendments in the Motor Vehicles Act, 1939 the Provincial Government established Road Transport Board in the Provinces for the purpose of operating transport service. These Boards continued to function till the establishment of the Province of West Pakistan. In 1958 the Motor Vehicles Act, 1939 was amended by the Motor Vehicles (West Pakistan Amendment) Act, 1958 (Act XIX of 1958). Subsection (1) of section 43-A of the Motor Vehicles Act was substituted to enable the Provincial Government to establish West Pakistan Road Transport Board. The Provincial Transport Boards, which were functioning in the Provinces before the establishment of Province of West Pakistan were allowed to continue to function till the establishment of the West Pakistan Transport Board. It was also provided that on the establishment of the West Pakistan Transport Board the entire undertaking of the Provincial Boards would stand transferred to the West Pakistan Road Transport Board. 12. In 1963 it was decided that the West Pakistan Road Transport Board be replaced by the Road Transport Corporation. Section 43-A of the Motor Vehicles Act, 1939 was accordingly amended by section 5 of the Motor Vehicles (West Pakistan Amendment) Ordinance, 1963 (Ordinance No. XI of 1963) Section 6 of the above Ordinance specifically provided that until the establishment of Road Transport Corporation the West Pakistan Road Transport Board shall continue to function. By section 7 the Road Transport Corporation was declared to be successor---in-interest of the Board and it was provided that the undertakings, assets and liabilities of the Board were to stand transferred and vested in the Corporation. 13. In 1965 the West Pakistan Motor Vehicles Ordinance, 1965, was promulgated, which repealed the Motor Vehicles Act, 1939 except Chapters VII and VIII and section 125. Section 70, of the Ordinance provided for the establishment of a Road Transport Corporation consisting of a Chairman and two members to be appointed by the Government for a term of three years. The Road Transport Corporation established under the Ordinance continued to function till the dissolution of Province of West Pakistan. 14. In 1972, the Punjab Government amended the West Pakistan Motor Vehicles Ordinance, 1965 by the West Pakistan Motor Vehicles (Punjab Amendment) Ordinance, 1972 (Punjab Ordinance XIX of 1972) which later on was enacted as the West Pakistan Motor Vehicles (Punjab Amendment) Act, 1973. Section 70 of the Ordinance was amended to increase the number of members from 2 to 7 and for the words 'Road Transport Corporation' wherever occurring in the Ordinance the words 'Punjab Road Transport Board' were substituted. Section 4 of the amending Act provided that the Road Transport Corporation would continue to function till the Road Transport Board was established. According to section 5 the Board was to be successor-in-interest of the Road Transport Corporation and its undertakings, assets and liabilities were to stand transferred to and vested in the Board. On 14-10-1972 the Governor of the Punjab established the Punjab Road Transport, vide notification No. 3191-72/1617-II. The Board was reconstituted on 16-7-1975 in view of the provisions of new subsection (2) of section 70 of the Ordinance as substituted by the West Pakistan Motor Vehicles (Punjab Amendment) Act, 1975 (Act XXIll of 1975), whereby the number of the members of the Board was increased from 7 to 11. The term of office of the members was fixed as two years, which, however, was subsequently extended from time to time. It was last extended for a period of six months with effect from 16-1-1985 by Notification No. TR-SOII-6-1/75, dated 14-1- 1985 till 16-5-1985. The Board was dissolved by the Governor on 9-5-1985 through the impugned notification. 15. It may be noticed that it was in 1951 that provisions were made in the Motor Vehicles Act. 199 to enable the Provincial Government to operate road transport service if it so decided. For this purpose the Provincial Governments were empowered to establish Road Transport Boards. It was specifically provided that the Board may operate motor transport on any route it may think fit. The jurisdiction of the Provincial Transport Authority and regional Transport Authority was excluded in
---
## Page 7
relation to the transport operated by the Board. It is an admitted fact that the Provincial Road Transport Boards/ Corporations established after the insertion of section 43-A in the Motor Vehicles Act, 1939 continued to function uninterruptedly till they were replaced by each other as a result of legislative amendments. Whenever any amendment was made in law it was ensured that the Board or Corporation functioning before the amendment should continue to function till it was replaced by the Board or Corporation established under the new law. The continuous functioning of the Board is necessary as in all matters relating to the co-ordination of rail and transport and in the fixation of fare and freights under Chapter XIV of the Ordinance it is incumbent upon the Provincial Government to consult the Board. In other words the existence of the Road Transport Board is a legal requirement, which cannot be dispensed with as…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.