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Coimbatore District Motor Thozhilalar Bus Service Pvt. Ltd., Erode Vs. O. Narmadammal - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 1085 of 1972
Judge
Reported inAIR1973Mad356; (1973)1MLJ18
ActsMotor Vehicles Rules, 1940 - Rule 156(1); Code of Civil Procedure (CPC), 1908
AppellantCoimbatore District Motor Thozhilalar Bus Service Pvt. Ltd., Erode
RespondentO. Narmadammal
Cases ReferredTurner Morrison and Co. Ltd. v. Hungerford Investment Trust Ltd.
Excerpt:
.....vehicles - permit - rule 156 (1) of motor vehicles rules, 1940 and code of civil procedure, 1908 - grant of permit challenged for reason that application for permit was signed by incompetent manager and not by managing director of company - provisions in articles of association empowers managing director to make appointments for management of company affairs - fact that company approved said appointment for its benefits renders contention that delegation was excessive untenable - company can appear before statutory functionary under act of 1940 through sub-delegates - held, grant of permit on application by manager justified. - - impliedly all that was done by the managing director to secure the permit in question has been ratified and the fruits of such labour are being enjoyed by..........enjoying the benefits of the permit so obtained and running the motor vehicle pursuant to such a permit granted by the statutory authority. but what is said is that on the date when the application was filed by the manager as sub-delegate it was not a valid application. i have already held that it is a valid application. even assuming that there was an excessive delegation, it is not for the respondent to question its propriety, for she is stranger to the arrangement. the company has not so far taken up any objection to the alleged irregular and excessive delegation of power by the managing director. that is a matter within the sphere of indoor management of the company. impliedly all that was done by the managing director to secure the permit in question has been ratified and the.....
Judgment:
ORDER

1. To consider applications for the grant of a stage carriage permit on the town service route Komarapalayam to Erode Government Hospital the Regional Transport authority fixed the date of hearing as 17-8-1971 and granted the same to the petitioner having regard to the fact that it was found suitable and otherwise also it secured the highest marks as per the prescribed rules. In fact, two grants were made on the same date to the petitioner. The aggrieved persons appealed. One of the grants was confirmed, but the order of the Regional Transport authority granting a second permit to the petitioner was set aside on the sole ground that the person who signed the application under Rule 156(1) of the Motor Vehicles Rules, 1940, for the grant of the stage carriage permit cannot be said to be a person who had the requisite authority in law to sign for a private limited company such as the Coimbatore District Motor Thozhilalar Bus Service Pvt. Ltd, and that therefore the entire application is not in order and should be treated as non-existent. It is against this order the present civil revision petition has been filed.

2. The petitioner attacks the order on two grounds. firstly, it is said that this ground was not raised even in the grounds of appeal preferred before the Appellate Authority and the petitioner was taken unawares and in any event it is said that the Manager who signed the application had the requisite authority in the eye of law and that action of his having been accepted and ratified by the company, the technical objection raised is not available to the respondent. On the other hand the contention of the respondent is that even though under the articles the Managing Director is the person in charge of the administration of the company, he cannot as such agent of the company delegate his powers once again to the Manager of the company, and that having been done in this case, the application should be deemed to be non est and should be dealt with as one which need not be considered at all. The case of the respondent is that she need not face an application which is invalid. If, on the date when the applications were considered, the authorization to apply was invalid or improper the invalid application cannot be ratified by the company at a later stage. It is also said that in an application for a grant new rights are sought and therefore Order XXIX, Civil Procedure Code governs the situation and the Managing Director has no power at all to delegate.

3. A copy of the application filed by the company but signed by its Manager was produced for my inspection. The particulars therein disclose that even at the time when the application was made, the Managing Director and all the directors of the company were aware that such an application was being filed by the company through its Manager. The relevant articles of association of the Private Limited company were scrutinized by me. Articles 32 and 33 which are relevant may be extracted for ready reference.

'32. All correspondence, agreements and the general transaction of the company excepting the court affairs shall be done only by the managing director.

33. The Managing Director shall have the power to appoint, and employ in or for the purpose of the transaction and management of the affairs and business of the company or otherwise from time to time remove or suspend such managers, engineers, clerks and other employees as they shall deem proper with such powers and duties and upon such terms as to duration of employment, remuneration or otherwise as the Managing Director shall think fit. Such appointments and dismissals should be brought to the attention of the Board of Directors within two months of such dismissal or appointment'.

Article 32 enables only the Managing Director to be in charge of all the correspondence, agreements and the general transaction of the company excepting the court affairs. For purposes of transacting and managing the affairs and the business of the company, the Managing Director has the power to employ Managers who shall be duly authorized to carry on such purposes or managerial affairs for and on his own behalf and generally for purposes of the company. The argument is that it is only in civil suits where a declaration as to the existence of vested rights or in which such rights are challenged any pleading can be signed and verified on behalf of the corporation by the secretary. But in a case where a right to obtain a stage carriage permit is sought by applying for it, then the pleading ought to be signed by the person authorized under the articles and not by any one delegated by him. This is an extreme contention. When a company applies for a stage carriage permit in the prescribed form and sets out all its qualifications and entitlements where under it would as a matter of law be enabled to secure the grant, then in effect it means that every applicant is placing before the statutory tribunal all its bundle of rights which have to be weighed relatively by the tribunal in juxtaposition to the other rights of other applicants and a reasonable adjudication ultimately made thereon resulting in a choice. It may be that the Tribunal may prefer one or the other of the applicants. But such preference is based on the relative appreciation of the material considered by it, which revolves round the rights of parties. But that does not mean that the applicant approaches the statutory tribunal without any semblance of a right in law to secure the grant. It is but reasonable to presume that unless an applicant is duly qualified under the Motor Vehicles Act to apply for a grant on the basis of certain vested rights in him, which in ordinary parlance have a nexus to the qualifications, he would not do so. He approaches the tribunal only to prove that he has the necessary qualifications and also the right to obtain a permit because he has a right in law to secure the same. As a matter of fact, if the rights of parties are not agitated before the Regional Transport Authority or the Appellate Authority, then one cannot understand as to how such a lis could be furthered before the higher hierarchy of tribunals including the High Court and the Supreme Court. The affected party comes upto the higher tribunal, may be the High Court or the Supreme Court, on the ground that his rights have been affected. If the subject-matter of an application for a grant is to be understood as merely one in which new rights are sought, then one fails to see how he could appeal further or go up to the High Court or the Supreme court in revision or by way of a writ petition. These legal processes are available to him as because his right to secure a grant in the circumstances, as according to the applicant he is fully qualified under the Motor Vehicles Act, are being challenged by others and these mutual challenges are to be adjudicated upon in a manner known to law and after observing the principles of natural justice by the appropriate tribunal considering the same. I am therefore of the view that even before a statutory functionary under the Motor Vehicles Act an incorporated company can appear through its sub-delegates.

4. The next question is whether the delegation is proper in the instant case as provided for under the articles. Article 32 enables the Managing Director only to be in charge of the general transactions or common administrative affairs of the company. It cannot be denied that to apply for a permit under the Motor Vehicles Act and that too by the Managing Director of a company whose normal trade is motor vehicles operation, is one of the items of business of the company. It is essentially a matter which relates to the general transactions with which the company is concerned. It is not a court affair because subject-matters brought to court normally relate to disputes between to company and third parties. Therefore an application by the company to the transport authorities for purposes of obtaining a permit on the basis of its qualifications and rights is a matter inextricably connected with the affairs and business of the company. In such circumstances Article 33 enables the Managing Director to appoint for purposes of transacting such business and managing such affairs a manager. Mr. Thiruvenkatachari however refers to the general rule delegatus non protest delegare. No doubt, an agent cannot seek for vicarious performance of his responsibilities by sub-delegation, for the above maxim is based on the degree of confidence the principal has in the agent. In all cases where an authority is coupled with a discretion or confidence, such an authority is not sub-delegatable. But where the Managing Director is entrusted with the sole authority to transact all the affairs and business of a company whose business is running of motor vehicles, then it is reasonable to expect that such an agency is neither coupled with a discretion nor based normally on confidence. It cannot therefore be said that the Managing Director cannot appoint a manager for purposes of normal administration of the affairs of the company. Under Article 33 he has such a power.

5. Even if the delegation as contended is excessive, it is for the company to take up the matter as it could always ratify such an act of its agent even though it transpires to be an excessive exercise of the power. The respondent is a competitor in trade. The company has not so far objected to the appointment of a manager by its Managing Director to apply for a permit. As a matter of fact, the company has approved the act as is seen by its supervening conduct in enjoying the benefits of the permit so obtained and running the motor vehicle pursuant to such a permit granted by the statutory authority. But what is said is that on the date when the application was filed by the Manager as sub-delegate it was not a valid application. I have already held that it is a valid application. Even assuming that there was an excessive delegation, it is not for the respondent to question its propriety, for she is stranger to the arrangement. The company has not so far taken up any objection to the alleged irregular and excessive delegation of power by the Managing Director. That is a matter within the sphere of indoor management of the company. Impliedly all that was done by the Managing Director to secure the permit in question has been ratified and the fruits of such labour are being enjoyed by the company. There is therefore demonstrable proof that the sub-delegation or the appointment of the manager by the Managing Director for making an application for a grant under the Motor Vehicles Act has been approved and ratified by the company. I am therefore unable to accept the contention that in this case there has been an illegal or invalid application and he respondent need not have to face such an application which is the product of such an alleged excessive delegation.

6. I have already referred to the fact that this is a case where the company has by necessary implication and by its present conduct approved the appointment of the Manager and in fact the necessary authority under which the Managing Director appointed the Manger has also been produced and this was long before the date when the Manager signed the challenged application. In those circumstances, when power was available to the Manager to sign the application for the grant and the action taken by him was approved by the directors, there can be no valid objection to the authorities dealing with such an application in the usual manner. The Supreme Court in Turner Morrison and Co. Ltd. v. Hungerford Investment Trust Ltd., : [1972]85ITR607(SC) , while considering the question whether a suit on behalf of a corporation by its secretary holding a power of attorney was maintainable or not, said--

'Where under the Articles of Association of a company a suit on behalf of the company has to be filed with the consent of the directors, a suit filed by the secretary holding a general power of attorney from the company would be maintainable even if the action taken by the secretary is approved by the directors subsequently'.

Applying this principle, the general business of the company has to be undertaken by the Managing Director. But he authorized in writing, which cannot be disputed in this case, the manager of the company to file an application for the grant of a permit. Pursuant to such a power the Manager filed the application. Even if there was an initial irregularity in the said application, the action taken by him and the application filed by him for the grant is maintainable as the entire process was approved by the company subsequently though not expressly but by necessary implication.

7. On merits it is not in dispute that the petitioner is entitled as of right to the permit. The Regional Transport Authority, in fact, granted it to the petitioner. But the Appellate Authority disturbed it only on the ground that there was no valid application for being considered. In these circumstances the civil revision petition is allowed and the order of the State Transport Appellate Authority set aside and that of the Regional Transport Authority restored. There will be no order as to costs.

8. Revision allowed.


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