Back
PUNJAB & HARYANA HIGH COURT
D.K.Mahajan, J.
Hoshiarpur Azad Transporters (Private) Ltd.
Versus
State Of Punjab
Civil Writ No. 1407 of 1959,
Decided On : FEBRUARY 18, 1960
MOTOR VEHICLES ACT, 1939 - SECTION 47(1) - SUSPENSION OF PERMITS - MALA FIDE ORDER - EXTRANEOU CONSIDERATIONS - ORDER BASED ON REFUSAL TO PAY MONEY - NOT PROPER TO ADJUDICATE WITHOUT REGIONAL TRANSPORT AUTHORITY AS PARTY.
Fact of the Case:
A dispute arose among shareholders of a transport company, leading to the formation of two groups, A and B. The company divided its assets, with group A receiving two-fifths and group B receiving three-fifths. Group A struggled to run the buses profitably and sent a letter to the Registrar of Joint Stock Companies, which was forwarded to the Regional Transport Authority (RTA). The RTA issued a notice to group B, and a meeting was held to discuss the formation of unauthorized groups. Arbitration was attempted, and an award was made, requiring group B to pay Rs. 20,000 to group A. Group B paid the cheque, but complaints were made that group A was not complying with the terms of the award. The RTA passed a resolution stating that if a cheque for Rs. 20,000 was not given by a certain date, steps would be taken for the suspension or cancellation of the permits. Group B refused to pay the cheque unless the terms of the award were complied with. The RTA suspended the company's permits for two months and gave nine permits to group A and six permits to the Punjab Roadways.
Finding of the Court:
The court found that the RTA's order suspending the permits was mala fide and based on extraneous considerations, as it was prompted by group B's refusal to pay Rs. 20,000 before a certain date. However, the court noted that the RTA was not a party to the petition and that it would not be proper to finally adjudicate on the matter without the RTA's presence.
Issues: Whether the RTA's order suspending the permits was mala fide and based on extraneous considerations.
Ratio Decidendi: The court held that the RTA's order was mala fide and based on extraneous considerations, as it was prompted by group B's refusal to pay Rs. 20,000 before a certain date. However, the court found that the RTA was not a party to the petition and that it would not be proper to finally adjudicate on the matter without the RTA's presence.
Final Decision: The court dismissed the petition with costs, as it could not make a final decision on the question of mala fides without the RTA being a party to the petition.
D.K.Mahajan, J.
1. This is a writ petition directed against the order of the Regional Transport Authority dated the 21st December, 1959, suspending the permits of group B in the Hoshiarpur Azad Transporters (Private) Ltd., Hoshiarpur, for a period of two months. The petition has been filed by the Company through Sardar Kabal Sing, General Manager of the Company. In order to appreciate the controversy; it is necessary to set out the facts in detail.
2. This Transport Company had fifteen permits on thirteen routes and was plying twelve buses. Sometime before the year 1956, disputes arose among the various share-holders of the Company and they formed themselves into two warring groups, to be hereinafter referred to as group A and group B. The Company on the 14th of February, 1956, entered into an internal arrangement whereby they divided the assets, two-fifth went to group A and three-fifth to group B. It is alleged by the petitioner that as group A could not run the buses profitably, they sent a letter to the Registrar of Joint Stock Companies on the 9th of November, 1958, which letter the Registrar forwarded to the Regional Transport Authority, Jullundur.
On this the Regional Transport Authority sent a notice to the Managing Director of group B on the 15th of January, 1959, and in the agenda of the Regional Transport Authority, a notice was given for a meeting regarding the formation of two unauthorised groups. In response to this notice, the parties appeared before the Regional Transport Authority on the 23rd of January, 1959. Attempts were made to arrive at a settlement. During the course of these negotiations it was decided at the instance of the Regional Transport Authority that the matter should be settled by arbitration and accordingly Sardar Darbara Singh was appointed an arbitrator. He made his award on the 16th of August, 1959.
There seems to be no written document, but the terms of the award are set out in paragraph 7 of the petition, and according to this award, a cheque for Rs. 20,000/- was to be given to the Secretary Regional Transport Authority for payment to group A by group B. This cheque was handed over to group A on the 1st of October, 1959, through the Secretary, Regional Transport Authority, and group A was asked to comply with the terms of the award. The cheque was cashed on the 3rd of October, 1959.
Thereafter complaints were made to the Regional Transport Authority that the terms of the award were not being complied with by group A, These complaints were discussed in the two meetings of the Regional Transport Authority on the 9th of November, 1959, and the 24th of November,. 1959, when a resolution was passed. The relevant portion of the resolution is as under:-
"The cheque of Rs. 20,000/- should be given by Shri Rura Ram to the Secretary Member on 30-11-1959 in the office. It has been made clear that if the cheque is not given on 30-11-1959, steps will be taken for the suspension or cancellation of the permits."
It seems that group B refused to pay the cheque and was only willing to do so if the terms of the award were complied with. Thereafter in the meeting held on the 21st of December, 1959, the Regional Transport Authority suspended the permits of this Company for a period of two months and for that period gave 9 permits to group A and 6 permits to the Punjab Roadways. It is not disputed that group A has no buses. The nine permits Were later taken away from group A on the 4th of February, 1960, and were given over to the Punjab Roadways. This order of the 21st of December, 1959, is the subject matter of this petition.
3 It may be mentioned that the parties to this petition are the Punjab State through Chairman, Regional Transport Authority, Jagir Singh, Director, Hoshiarpur Azad Transporters (Pvt.) Ltd., and Punjab Roadways, Jullundur., The Regional Transport Authority has not been made a party.
4. The contentions of the learned counsel for the petitioner are that the Regional Transport Auth
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
