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  • Rule 53(d) of the Bengal Motor Vehicles Rules, 1940,
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  • Rule 53(d) of the Bengal Motor Vehicles Rules, 1940,
Smart Summary

Factual and Procedural Background

This appeal arises from an order dated 25 July 1968 of Sinha, J., which quashed a resolution of the Regional Transport Authority (RTA), Bankura, dated 27 September 1965. The core factual matrix in the opinion is as follows:

  • An application was made for a permanent stage carriage permit for the route Bankura to Durgapore Railway Station via Beliatore. The application was in the name of M/s S.C Dey & Co. (P.) Ltd.
  • Five persons — Sadhan Chandra Dey, Sunil Kumar Banerjee, Lakshmi Rani Dey, Bhola Nath Banerjee and Kalipada Dey — (described in the papers as the petitioners) claimed to have jointly applied and said they intended to form the limited company M/s S.C Dey & Co. (P.) Ltd.; in the application the petitioners' names appeared as “partners”.
  • A verification roll filed before the RTA contained observations by the Motor Vehicles Inspector (Non-Technical), Enforcement, Bankura, noting (among other items) that the entity was an unregistered company, that one partner had passenger transport experience, that finance would be provided by Krishna Trading Company, and that the “company does not pay Income-tax”; the Inspector also noted “no experience in passenger transport business. Hence rejected.”
  • The RTA considered applications on 27 and 29 September 1965 and decided to grant the permit to Kali Kinkar Kundu.
  • The petitioners filed an application under Article 226 of the Constitution challenging the RTA's decision. Sinha, J. quashed the RTA's decision. Kali Kinkar Kundu (the grantee of the permit) appealed against Sinha, J.'s order to the Bench delivering the present opinion.

Legal Issues Presented

  1. Whether the Regional Transport Authority contravened principles of natural justice by having only two members sign the final proceedings though three members had originally heard the petitioners' case.
  2. Whether the RTA had properly applied its mind to the petitioners' application, given the Motor Vehicles Inspector's verification report stating that the applicant (M/s S.C Dey & Co. (P.) Ltd.) had “no experience in passenger transport business.”
  3. Whether proceedings were vitiated by irregularity because the minutes were signed on different dates by different members (signature dates of 27th and 29th September 1965).
  4. Whether an application made in the name of a company that did not exist (i.e., an unregistered company) is a valid application before a Transport Authority and whether the RTA could grant a permit in the name of such a non-existent company.
  5. Whether the petitioners (who purported to act through or for an unregistered company) had sufficient legal interest/standing to maintain an application under Article 226 of the Constitution.

Arguments of the Parties

Petitioners' Arguments (as presented to Sinha, J.)

  • The petitioners contended that the Regional Transport Authority contravened principles of natural justice because although three members heard the petitioners, only two members took the final decision (implying that the third member was not consulted in the final determination).
  • The petitioners relied on the verification report by the Motor Vehicles Inspector, which contained the remark that M/s S.C Dey & Co. (P.) Ltd. had “no experience in passenger transport business,” and Sinha, J. treated this material as establishing that the RTA did not properly apply its mind and thus quashed the RTA's decision.

The opinion does not contain a detailed account of the arguments advanced by Kali Kinkar Kundu or by the State in opposition beyond procedural references; counsel appearances are noted but their full submissions are not recorded in the text provided.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sri Guru Motor Bus Service Private through Tarapada Dey, Managing Director v. Radharaman Dhar, A.F.O.O No. 466 of 1968 (Cal) (unreported) Authority that a Transport Authority is not competent to grant a licence in the name of a Company which is not registered (i.e., an unregistered/non-existent company). The Bench stated respectful agreement with this Division Bench judgment, treated it as binding, and relied on it as an additional ground for dismissing the petitioners' application because the application before the RTA had been made in the name of a non-existent (unregistered) company.

Court's Reasoning and Analysis

The court's reasoning proceeds in several discrete steps, addressing the reasoning of Sinha, J. and other points raised on appeal:

  1. On Sinha, J.'s basis for quashing: Sinha, J. had relied on the Motor Vehicles Inspector's verification report, which included an observation that the applicant company had “no experience in passenger transport business,” and concluded that the RTA “did not apply its mind” and that the considerations for rejecting the petitioners' application were “totally irrelevant and extraneous.” The Bench in the present appeal respectfully disagreed with Sinha, J.'s conclusion on this point.
  2. Duty and relevance of the Motor Vehicles Inspector's report: The Bench held that it was proper for the Motor Vehicles Inspector to consider and report on whether an applicant had experience in transport business, and that this duty extended, practically speaking, to cases where the application nominally named a company (even if unregistered). The court observed that, although strictly speaking an unregistered company has no legal existence and one cannot logically predicate attributes of a non-existent entity, it would be unreasonable to expect such metaphysical distinctions from the Motor Vehicles Inspector or from lay members of the RTA. The court therefore found the Inspector's observation about lack of experience to be a relevant and valid consideration by the RTA.
  3. On the alleged procedural irregularity (signatures/dates): The court examined the fact that two members signed the proceedings dated 29 September 1965 while the third member signed with date 27 September 1965. Citing Rule 53(d) of the Bengal Motor Vehicles Rules, 1940 (which provides that in a three-member Authority a quorum is two), the court held that the Authority was properly constituted when a quorum was present. The court accepted the explanation that deliberations were held over two dates and that the minutes were recorded in composite form; it was satisfied that Mr. S.K. Singh had participated in deliberations on the relevant agenda item on 27 September and that no technical breach or substantial irregularity occurred that prejudiced the petitioners.
  4. On the validity of the application because of non-existent company: The court accepted and applied the Division Bench decision (Sri Guru Motor Bus Service) to the effect that a Transport Authority cannot grant a permit in the name of a company not registered at the time of application. The court regarded this decision as binding and concluded that the petitioners' application, being in the name of a non-existent company, was not a valid application before the RTA.
  5. On standing/interest to sue under Article 226: Flowing from the prior point, the court observed that if the application had been in the name of a non-existent company, it was difficult to say that the petitioners had a legal interest in the matter. The court noted that this point was not pressed by Sinha, J. in his order and was not framed in the grounds of appeal, though counsel for the appellant and for the State stated that the point had in fact been taken earlier. The Bench did not base its decision solely on this ground but observed that it presented a valid basis to dismiss the petitioners' Article 226 application.
  6. Conclusion of analysis: Given the court's conclusions — (a) that the Motor Vehicles Inspector's report was a relevant and proper consideration and thus Sinha, J.'s reasoning on that point was incorrect; (b) that there was no prejudicial procedural irregularity as to quorum/signature dates; and (c) that the application was made in the name of a company not in existence (a separate and independently sufficient ground to dismiss) — the court allowed the appeal.

Holding and Implications

Holding:

APPEAL ALLOWED. The judgment and order of Sinha, J. dated 25th July 1968 is set aside; the Rule (writ) is discharged; and the petitioners' application under Article 226 is dismissed.

Implications and consequences:

  • The direct effect is that the decision of the Regional Transport Authority granting a permit to Kali Kinkar Kundu stands (i.e., the quashing by Sinha, J. is reversed), and the petitioners' challenge is dismissed.
  • The Bench emphasised that the Motor Vehicles Inspector's observation about lack of experience was a legitimate and relevant consideration for the RTA; Sinha, J.'s contrary conclusion was reversed.
  • The court relied on an existing Division Bench decision that a Transport Authority cannot grant a permit in the name of an unregistered/non-existent company, and treated that decision as binding, using it as an additional ground that would have supported dismissal of the petitioners' application.
  • No costs were ordered: the court expressly made no order as to costs.
  • The opinion does not purport to lay down a novel legal principle beyond applying existing authorities and rules; the decision reverses Sinha, J.'s order and disposes of the petition on the stated grounds rather than creating a new precedent.

    Kali Kinkar Kundu v. Sadhan Chandra Dey And Others

    Arun K. Mukherjea, J.:— This is an appeal against the judgment and order dated 25th July, 1968 of A.K Sinha, J. by which his Lordship issued a Writ in the nature of Certiorari to quash a resolution made by the Regional Transport Authority, Bankura, on 27th September, 1965.

    2. The short facts of the case are as follows:

    The appellant made an application for the grant of a stage carriage permit on the route from Bankura to Durgapore Railway Station via Beliatore. Sadhan Chandra Dey, Sunil Kumar Banerjee, Lakshmi Rani Dey, Bhola Nath Banerjee and Kalipada Dey, who are the petitioners in the application under Article 226 of the Constitution, claimed to have jointly applied for the same permit. They say that they were desirous of forming a limited company for the purpose of carrying on a transport business under the name and style M/s. S.C Dey & Co. (P.) Ltd. The application was made actually under the name and style of M/s. S.C Dey & Co. (P.) Ltd. In the application, the names of the petitioners were given as “partners” of the said Company. At page 34 of the paperbook, there is a copy of the verification roll which had been filed by the petitioners before the Regional Transport Authority, Bankura, in connection with their application. At the end of the verification roll there is a certificate by the Motor Vehicles Inspector (Non-Technical), Enforcement, Bankura to the following effect:—

    “Verified.

    It is an unregistered Company. Shri Sadhan Ch. Dey, one of the partners, has passenger transport business experience (certificate enclosed). Krishna Trading Company, Bankura will finance the Company to purchase a new bus (certificate enclosed). Shri Sunil Kumar Banerjee, one of the partners possesses Medium Motor Vehicles driving licence. The company does not pay Income-tax.

    Other points appear to be true. Garage will be inspected later on if the Company gets the route,”

    3. The Regional Transport Authority, Bankura, considered all the applications for the permanent stage carriage permit in the aforementioned route at meetings held on 27-9-65 and 29-9-65. The minutes of the meeting of the Regional Transport Authority in connection with the applications which had been filed have been annexed to the petition and are to be found at pages 11 to 13 of the paperbook. It appears that after hearing all the applications and all objections relating thereto, the Regional Transport Authority decided that the stage carriage permit in question would be granted to one Kali Kinkar Kundu. The petitioners, therefore, made an application in this Court under Article 226 of the Constitution challenging the aforesaid decision of the Regional Transport Authority. After affidavits had been filed by all parties, Sinha J. heard the application and quashed the decision of the Regional Transport Authority. Kali Kinkar Kundu who had received the permit under the decision of the Regional Transport Authority has now come up on appeal against that order of Sinha, J.

    4. As far as we can ascertain from the judgment of Sinha J. the main contention of the petitioners before his Lordship was that the Regional Transport Authority had contravened the principles of natural justice in so far as only two members took the final decision without consulting the third member, though the petitioners were heard really by three members. Though Sinha J. did not come to any final decision on this point, it appears from the trend of his Lordship's judgment that his Lordship perhaps thought that there was some slight irregularity in the proceedings of the Regional Transport Authority. His Lordship, however, did not like to dispose of the matter on this point. His Lordship preferred to dispose of the application on another short point. Sinha J. analysed the verification report submitted by the Motor Vehicles Inspector and came to the conclusion on the basis of that report that the Regional Transport Authority did not actually apply its mind to the petitioners' case at all. After setting out the verification report in which the Motor Vehicles Inspector had made a remark that the applicant M/s. S.C Dey & Co. (P) Ltd. had “no experience in passenger transport business. Hence rejected.” Sinha J. observed that such an observation could not be made upon the application at all since the applicant was an unregistered Company. Sinha J. actually makes the following comment:—

    “If this application is, therefore, rejected on the ground that this S.C Dey & Co. (P) Ltd. had no experience in passenger transport business, then it can be safely concluded that the R.T.A did not apply its mind at all. On the face of the report given by the Motor Vehicles Inspector it was impossible to conclude that S.C Dey & Co. (P) Ltd. had no experience in passenger transport business. In my view, the considerations made by the Regional Transport Authority in rejecting the petitioners' application were totally irrelevant and extraneous and in the facts and circumstances of the case could not arise at all.”

    5. It is on this ground that Sinha J. quashed the proceedings of the Regional Transport Authority. We respectfully disagree with the conclusion of Sinha J. on this point. The Motor Vehicles Inspector was under an obligation to consider whether a particular applicant had any experience of transport business. Even in the case of a Company or a corporate body, it is his duty to give a report whether the Company or the corporate body had any such experience. Ordinarily, the experience of one share-holder in a particular business cannot be treated as the experience of a Company in that business. Therefore, if the Motor Vehicles Inspector reports that the applicant in question did not have any experience in transport business, it is difficult to find fault with that report. It is true that the Company not having been registered did not have any legal existence at the relevant time. Therefore, it is not strictly speaking logical to say of an unregistered Company that such a Company does or does not possess experience but it would, in our opinion, be unreasonable to expect such metaphysical considerations from a Motor Vehicles Inspector or even from a member of the Regional Transport Authority. How many lay members of the public would know that it is not logically permissible even to predicate a quality of a non-existent subject and that non-existence of experience is also such a quality. Looking at it from a commonsense point of view, if the Motor Vehicles Inspector says that this particular Company has no experience and if the members of the Regional Transport Authority accept such a report, we do not think that they are taking into consideration any irrelevant matter. On the other hand, this is a very relevant point which it was their duty to consider and they have in fact done so. Therefore, we are in respectful disagreement with the learned Judge as regards his finding that the Regional Transport Authority's ground for rejection of the petitioners' application was irrelevant. To our mind, this ground of rejection was both valid and relevant.

    6. This practically disposes of the only ground on which Sinha J. disposed of the application and quashed the decision of the Regional Transport Authority. But while hearing the appeal there were several other points which arose and which were argued from the bar. We shall briefly refer to those points. First, a point was raised as to whether the proceedings before the Regional Transport Authority had been vitiated by any irregularity. It appears that the proceedings were signed by two members, namely, Mr. S. Sen Gupta and Mr. S.K Dutta on 29th September, 1965 while the third member, namely, Mr. S.K Singh signed on 27th September, 1965. The petitioners contended that this was an irregularity. We do not, however, consider it to be an irregularity. Under Rule 53(d) of the Bengal Motor Vehicles Rules, 1940, it is provided as follows:—

    “53(d). In a Regional Transport Authority the number of members whose presence shall constitute a quorum shall be—

    (i) In the case of an Authority consisting of three members, two, or

    (ii) in any other case, three”.

    7. It is clear that under the rules, the Regional Transport Authority was properly constituted so long as it had a quorum. This is also a very sensible rule for otherwise it would be difficult to expect any public body to act regularly and properly. In this particular case, the Regional Transport Authority was, of course, a small body with three members but there are many Regional Transport Authorities which have a larger body and it is not possible to expect that all members of the public who are on the body of the Regional Transport Authority should be present at every meeting. Apart from this technical rule, it is clear from an affidavit that was filed and the proceedings before Sinha J. that S.K Singh was present at the Regional Transport Authority's meeting held on 27th September, 1965 and that all the items could not be taken up on 27th September, 1965, for want of time and the matter had to be adjourned till 29th September, 1965 when Mr. Singh could not be present. He actually participated in the deliberations relating to Items Nos. 1 to 13 on the agenda which included Item No. 4 relating to the subject-matter of the present appeal. It is also clear that at the meeting held on 27th September, 1965, the Regional Transport Authority had decided to grant the permit to Kali Kinkar Kundu in the meeting. On that day all the three members were present. As far as we can see from the minutes, some confusion has been created by the fact that though deliberations took place on two dates, the minutes of the proceedings were written in a composite report after the entire deliberations were over. Mr. Singh, however, took care not to give a wrong impression that he was present on both dates and that is why he wrote out the date 27th September, 1965 immediately below his signature. We are thoroughly convinced that there has been neither a technical breach of the rules nor any substantial irregularity in the proceedings which could have prejudiced the petitioners in regard to their applications.

    8. The second point that strikes us is that as regards the application before the Regional Transport Authority about which the petitioners are agitating that application is not a valid application at all, because that application was made in the name of a Company which was not in existence at the relevant time. Therefore, the Regional Transport Authority could not have granted a permit in favour of M/s. S.C Dey & Co. (P) Ltd. In a Division Bench judgment of this Court, namely, Sri Guru Motor Bus Service Private through Tarapada Dey, Managing Director v. Radharaman Dhar, in A.F.O.O No. 466 of 1968 (Cal), (unreported), A.N Ray J. held that a Transport Authority is not competent to grant a licence in the name of a Company which is not registered. In that case, one Tarapada Dey describing himself as managing partner of Sri Guru Motor Bus Service Private Ltd. applied for a permit in the name of the Company though on the date of such application there was no Company called Garbeta Sri Guru Motor Bus Service Private Ltd., A.N Ray, J. had no hesitation in striking down this permit. We are in respectful agreement with this decision of the Court of Appeal by which, in any event, we are bound. In our view, this is an additional ground for which the petitioners' application before Sinha, J. should have been dismissed.

    9. There is one other ground which really arises out of the immediately preceding objection which we have dealt with just now. Considering that the application that was actually made before the Regional Transport Authority was not an application made by or on behalf of the petitioners but an application made by and in the name of a nonexisting Company, it is difficult to say that the petitioners have any legal interest in this matter.

    10. In these circumstances, we do not see how the petitioners can sustain an application under Art, 226 of the Constitution of India. This point does not appear to have been taken before Sinha J. and is not mentioned in the grounds of appeal either. Mr. Banerjee appearing for the appellant and Mr. Sushil Kumar Banerjee, appearing for the State, tell us that this point was actually taken before Sinha J. Be that as it may, we do not and need not base our judgment on that point. We only observe that this itself is a good ground for dismissing the application.

    11. In view of what we have said, the appeal is allowed. The judgment and order of Sinha J. is set aside and the Rule is discharged and the application of the petitioners is dismissed.

    12. We make, however, no order as to costs.

    13. Sabyasachi Mukharji, J.:— I agree.

    14. Appeal allowed.

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    Kali Kinkar Kundu v. Sadhan Chandra Dey And Others
    (Feb 18, 1970)