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P L D 2005 SC 193

ARSHAD MEHMOOD AND OTHERS
V/S
GOVERNMENT OF PUNJAB THROUGH SECRETARY, TRANSPORT CIVIL

Per Iftikhar Muhammad Chaudhry, J-

(a) Constitution of Pakistan (1973) Art. 18,3 & 185-

Leave to appeal was granted to examine the following questions :-

(a) “Whether the insertion of Section 69-A in Punjab Motor Vehicles Ordinance 1965 by virtue of Punjab Ordinance No XLVI of 1999 is in the public interest and is not violative of the constitutional guarantee of right of trade and business under Article 18 of the Constitution of Islamic Republic of Pakistan, 1973 and is in consonance with the provisions of Monopolies and Restrictive Trade Practices (Control and Prevention Ordinance No. V of 1970.

(b) The addition of Section 69-A in the Punjab Motor Vehicles Ordinance 1965 would not amount to protect and promote the vested interest of a specific class by depriving large number of people associated with the transport business of their legitimate right of earning and they have not been denied the equal and fair opportunity of right of business as provided under the Constitution of Islamic republic of Pakistan, 1973.

(c) The exclusion of wagons and mini bus owners from transport business under franchise routes scheme is not a departure to the policy of constitution of free competition and would not amount to take away the right of people from using the vehicle of their own choice as means of transport and compel them to travel through the franchise transport.

(d) The imposing of unreasonable restriction on the free trade and business is not a social and economic exploitation as provided in Article 3 of the Constitution of Islamic Republic of Pakistan, 1973.

(e) The provisions of section 69-A ibid for exclusion of wagons and mini buses as stage carriages from the franchise routes in the private sector is not a discriminatory law and the distinction created is based on reasonable classification.”[p. 209] A

Perusal of Section 69-A of the Ordinance reveals that it has introduced “franchise system” for operating “stage carriages” absolutely different from the system prescribed by the Ordinance. One of the salient features of this law is that under its Sub-Section (2) Government has been empowered to declare the routes “franchise”, to be granted under its instructions by the Regional Transport Authority, to the exclusion of all other operators of stage carriages and upon grant of a “franchise” of a specified route, the Regional transport Authority under subsection (4) has been empowered to cancel all existing stage carriages permits on such routes or a portion of outrĂ©. Such oppressive provision has been inserted in the statute without realizing that the operators of stage carriages are already carrying on a lawful trade under valid permits, since long without any allegation of violating the law under which route permits were granted to them. Further more, no notice, before canceling their lawful licenses, were given to them as section 69-A does not envisage such provision. Thus it can be safely held that a right which has accrued to them to carry on a lawful business, according to the Ordinance, could not be denied to them by introducing “franchise” system by the Provincial Government, in view of the guarantees, provided to them under Article 18 of the Constitution. It is to be note that under the scheme of the Ordinance, the Provincial Government, except supervising, had no administrative role to play as the trade of transport is regulated by the Regional or Provincial Transport Authority. Thus, we have reason to believe that under Section 69-A of the Ordinance, an administrative role has been given to the Provincial Government for effectively carrying out its object including the exclusion of all other transporters, who are already in a lawful business, because if an operator possesses valid route permit for plying the vehicles on a route or the routes obtained by it from Regional Transport Authority or the Provincial Transport Authority, legally Government cannot exclude him from the business except in terms of section 62 of the Ordinance. However, it is no body’s case that the regional Transport Authority after insertion of section 69-A in the Ordinance ever exercised its jurisdiction under section 62 of the Ordinance and cancelled their permits.

In view of above background it seems appropriate to examine the constitutionality of section 69-A of the Ordinance, particularly power of Government of Punjab to grant franchise in the trade/business of transport. [p. 27] D

It is well settled that the right of trade/business or profession under Article 18 of the Constitution is not an absolute right but so long a trade or business is lawful a citizen who is eligible to conduct the same cannot be deprived from undertaking the same, subject to law which regulates it accordingly. The word “regulation”, as used in Article 18 of the Constitution has been interpreted by the Courts of our country keeping in view the provisions of Article 19(1)(g)(6) of the Indian Constitution. [p. 219] F

It may be noted that word “reasonable” was inserted in Article 19 of the Indian Constitution, vide Constitution (First Amendment Act 1951), but it has not defined the expression “reasonable restriction” itself. However, from different judicial pronouncements following definitions can be considered for purpose of ascertaining the meaning of “reasonableness of restriction” on the fundamental rights of the citizens, to conduct any lawful trade or business :–

(i) The limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. M/s Dwarka Prasad v. State of U.P. (AIR 1954 SC 224), P.P. enterprises v. Union of Indua (AIR 1982 Sc 1016).

(ii) The Court would see both to the nature of the restriction and procedure prescribed by the statute for enforcing the restriction on the individual freedom. Not only substantive but procedural provisions of statute also enter into the verdict of its reasonableness. Kishan Chand v. Commissioner of Police (AIR 1961 SC 705).

(iii) The principles of natural justice are an element in considering reasonableness of a restriction but the elaborate rules of natural justice may be excluded expressly or by necessary implication where procedural provisions are made in the statute. Haradhan Saha v. State of W.B.[(1975) 3 SCC 198]

(iv) Absence of provision for review makes the provisions unreasonable. K.T. Moopil Nair v. State of Kerala (AIR 1961 SC 552).

(v) Retrospectivity of a law may also be the relevant factor of law, although a retrospectivity of law does not make it automatically unreasonable. Narottamdas v. State of Maddhya Pradesh and others (AIR 1964 SC 1667).

(vi) Reasonable restriction also includes cases of total prohibition of a particular trade or business which deprive a person of his fundamental right under certain circumstances. Narindra Kumar Vs. Union of India (AIR 1960 SC 430) [p. 220 & 221] G

“Regulation.– the act of regulating; a rule of order prescribed for management or government; a regulating principle; a precept. Rule of order prescribed by superior or competent authority relating to action of those under its control. Regulation is rule or order having force of law issued by executive authority of government.”

Perusal of above definition persuades us to hold that there cannot be denial of the Government’s authority to regulate a lawful business or trade, but question would arise whether under the garb of such authority, the Government can prohibit or prevent running of such a business or trade. [p. 221] H

It may be noted that broad principles laid down in the judgments of Indian jurisdiction, some of which have been noted herein above, interpreting the word “reasonable restriction”, did not say that it would also mean “prohibition” or “prevention” completely, except under certain circumstances. [p. 223] I

Argument of learned counsel for respondents is that competent authority can regulate any trade or profession by a licencing system. There may be no cavil but this clause has to be read conjunctively with proviso (b) of Article 18 of the Constitution, according to which an element of free competition to regulate a trade, commerce or industry has been introduced because if competition in the trade is discourage, it would negate the provisions of Article 3 of the Constitution, which deals with the elimination of all forms of exploitation and if due to non-competition, franchise is granted on specified rouutes, it would tantamount to monopolize the trade/business of transport. [p. 231] L

It may be noted that Section 69-A of the Ordinance is coached in such a language that open feels no difficulty to draw an inference that a new system is being introduced, which is absolutely different and distinct from the licencing system of running the transport as has been provided under the Ordinance 1965, without providing right of hearing to these stage carriages’ owners, who are being excluded from the trade, as observed herein above but no right of appeal or revision against the order of Secretary, Regional transport Authority or the Government, has been provided, therefore, due to this reason as well, section 69-A seems to be unreasonable law. Thus it can be safely concluded that the restrictions imposed by Section 69-A of the Ordinance leading to exclude the appellants from the trade/business of transport had prevented/prohibited the appellants and many other transporters to enjoy the guaranteed fundamental right of freedom of trade/business as per Article 18 of the Constitution. [p. 234] P

In our opinion, there is no distinction in the Indian Constitution as well as our own Constitution to the extent of grant of franchise in a trade, therefore, we are persuaded to hold that in the trade of transport by inserting section 69-A of the Ordinance, grant of franchise on specified routes is contrary to the provisions of Article 18(b) of the constitution, therefore, deserves to be declared void, under Article 8 of the Constitution. [p. 237 & 238] R

It is important to note that Ordinance of 1999 could not be placed before the Provisional Assembly to make it an Act because during its subsistence Provincial Assembly was suspended n account of Military takeover on 12th October, 1999, therefore, it maybe legitimately presumed that in the enactment of section 69-A of the Ordinance the public views through elected representative are not included. Thus in the absence f public opinion in promulgating section 69-A of the Ordinance, it may not be difficult to infer that it was not promulgated in the public interest and general welfare etc. Indeed had this law been discussed in the Assembly, through the representatives of the public, it might have changed its complexion, to bring it within the command of Article 18 of the Constitution.[p. 238] S

In the alternative it may be observed that the High Court seized with the writ petition ought to have conducted an inquiry in the interest of justice to ascertain as to whether addition of section 69-A of the Ordinance is for the public interest and general welfare and thus a valid law according to Article 18 of the Constitution. Such exercise can always be undertaken in the interest of justice or the Court can always direct the government to conduct inquiry in this behalf and to decide the validity of Section 69-A of the Ordinance as done in the case of Pratap Pharma (Pvt) Limited v. Union of India (AIR 1997 SC 2648) [p. 238] T

We have gone through the judgments cited by the learned counsel. The facts narrated therein are distinguishable. However, we are of the opinion that in the instant case, right of franchise on specified routes has not been granted to private respondents in pursuance of any directives of the policy but in accordance with provisions of section 69-A of the Constitution and this Court is not debarred to examine its validity on the touchstone of Article 8 of the Constitution, because if any law is promulgated in derogation of fundamental rights, it would be declared void because at the cost of fundamental rights, guaranteed by the Constitution, the executive Government is not empowered to frame a policy. Resultantly, the argument so raised by learned counsel has no force.

The contentions raised by the learned counsel do not call for examination in depth for the reason that f a law, under which certain proceedings have been drawn, fails to stand the test of Article 8 of the Constitution and is liable to be declared void then any proceedings drawn under it, howsoever, solemn, cannot sustain in law.

It may be observed that so far we have considered the validity of section 69-A of the Ordinance on the touchstone of Article 8 and 18 of the Constitution. We have not entered into factual controversy with regard to proper exercise of discretion by the competent authority, in the discharge of its functions under section 69-A of the Ordinance and its effect, whether alternative routes have been granted to the appellants to operate their stage carriages and the controversy which has been raised in respect of grant of franchise on the specified routes with mala fide intention, as contended by Mr. Nasir Saeed Sheikh learned counsel for appellants in Civil Appeal No. 226 of 2003, and my Mr. Aftab Gul, learned Advocates Supreme court for one of the franchise holders, for the reason that in impugned judgment, learned High court has not attended to the factual aspects of the case. In our view, it would not be fair and in the interest of justice to enter into factual controversy for the first time also because it would be against the well settled practice of this Court. [p. 242] X

It may be noted that appellants and the respondents both are similarly placed being owners of stage carriages and prior to the grant of franchise to the private respondents, appellants were in possession of valid rout permits for plying their stage carriages on the specified routes but their route permits stood cancelled due to grant of franchise to the respondents in view of the provisions of section 69-A of the Ordinance. It means that section 69-A of the Ordinance has created a classification between franchise holders and appellants-transporters. Such classification is not permissible under Article 25 of the Constitution, because the differentia between both the classes must have rational nexus to the object, sought to be achieved by such classification. As such we are of the opinion that section 69-A of the Ordinance is also violative of Article 25 of the Constitution. [p. 242 & 243] Y

In view of above discussion, we are persuaded to observe that it is not too late for the Government of Punjab :–

(a) To suitably amend the Motor Vehicle Ordinance, 1965, if need be, in the public interest and welfare, consistent with the provisions of Article 8 of the Constitution of Islamic Republic of Pakistan, ensuring fair opportunity to the transporters to conduct their business freely, with a provision of better facilities of travel to the passengers in a dignified manner, through reliable stage carriages.

(b) It has been noticed that the respondents while obtaining franchise on specified routes have obtained 70% loans against their equity of 30%, therefore, the Government may examine to run transport on the specified routes itself, as contemplated by the proviso (c) of Article 18 of the Constitution.

(c) Government may take any other constitutional or administrative steps, which are deemed fit by it in the public interest for solving the problems of transport in the urban areas of the Province of Punjab. [p. 243] Z

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