P L D 1960 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.-This is a certified appeal by the West Punjab Government against The Pindi-Jhelum Valley Transport, Ltd., Rawalpindi., a joint stock company, from the appellate decree of the former High Court of Judicature at Lahore, affirming the decree passed by the Senior Subordinate Judge, Rawalpindi, for damages to the tune of Rs. 1,50,000 to be paid by the appellant to the respondent company. The facts which gave rise to this litigation are as follows. Sixty-seven route permits valid for two years for the Rawalpindi-Kohala road, thirty-six for stage carriages and thirty -one for contract carriages, were granted on 28th October 1940, by the Authority then competent to issue such permits. They were subsequently renewed from time to time, the first renewal being up to 27th October 1943, the second up to 30th April 1944, the third up to 31st July 1944, and the last up to 31st March 1945. Near the end of December 1943 the Punjab Government con ceived of, and announced what has been described as a rationaliza tion scheme, according to which route permits were to be issued in future for the route in question not to individuals but only to limited liability companies or co-operative societies. The scheme contained a suggestion that individual permit-holders should form themselves into such companies or societies on order to be eligible for the route permits. In pursuance of this scheme the 27 permit-holders, referred to in the proceedings as associating individuals, and some other persons formed a limited liability company called the Pindi-Jhelum Valley Transport Ltd., which was registered under the Companies Act on 20th November 1944. Against the vehicles and permits surrendered by them, the associating individuals were allotted shares in the capital of the company. The company incurred an expense of Rs. 836-8-0 in having itself incorporated and a further expense of Rs. 9,031-15-0 is alleged to have been incurred in compliance with a direction issued by the Regional Transport Authority to construct garages, workshops and parking places. These were war days and the distribution of petrol to owners of vehicles was being regulated under the Petrol Rationing Control Order. When the route permits, which had in the meantime been transferred by the competent authority from their original 27 holders to the company, were about to expire, the company applied for petrol coupons for its vehicles for the quarter commencing with 1st April 1945, but the coupons were refused by the Petrol Rationing Authority, which was the Regional Transport Authority itself, on the ground that the permits held by the company were valid only upto 31st March 1945, and that therefore the question of issuing petrol on their basis for the subsequent quarter did not arise. In January 1945 the Punjab Government decided to run its own vehicles on the Rawalpindi-Kohala route and a few months later, to be exact on 15th April 1945, started a regular Government transport service. The company then institu ted a suit against the Government and the Chairman, the Secretary and Members of the Regional Transport Authority, an authority which had been set up under the Motor Vehicles Act, 1939, for recovery of Rs. 1,50,000 as damages and for certain other reliefs. The suit was founded on two grounds, first that the permits held by the associating individuals which were renewed after 27th October 1942, must in law be held to be operative for a period of 3 years from the date of each renewal and that therefore the order refusing to issue petrol for the company's vehicles was illegal, and, second, that the announcement of the rationalizing scheme by the Government and the statements that were made from time to time by the Regional Transport Authority, an authority set up by the Government, suggesting that the associating individuals should form themselves into a company operated as estoppel against the Government precluding it from refusing to issue petrol permits to the company or from acting in any manner which had the effect of stopping the transport business of the company. The Government took several defences to the suit, including the pleas that the permits which expired on 31st March 1945, were temporary permits and were valid only for the period for which they had been transferred, that there was no estoppel, that no suit of the kind lay and that the Court had no jurisdiction in the matter. On the pleadings of the parties the Court framed nine issues on which evidence was led by the parties and lengthy arguments addressed. In the result the Court found on the material issues in favour of the plaintiff and decreed the claim for Rs. 1,50,000 as damages for the period from 1st April 1945 to 28th August 1945, the date of the suit. The prayer for mandatory injunction to direct the Government and the Regional Transport Authority to recognise the validity of the permits was however refused. The High Court agreed with the findings of the Senior Subordinate Judge and dis missed the appeal. As we look at the matter after hearing full arguments from the bar the short question that requires determination in this appeal is whether the respondents' contention that the last renewal of the permits was valid for a period of 3 years under section 58 of the Motor Vehicles Act is well-founded in law. It is true that a permit issued or renewed in compliance with the procedure pres cribed by section 57 for the grant of a permit was under section 58 of the Motor Vehicles Act operative for a period of 3 years from the date of the grant or the renewal, but at the time when the renewals in this case except the last one were made, the Defence of India (Amendment) Ordinance, XXIII of 1942 was in force. That Ordinance had modified section 62 of the Act by making a tem porary permit effective for a period exceeding four months and had enabled the Provincial Government to issue directions that in a particular case the procedure laid down in section 57 of the Act need not be followed. And by the time the last permit for the period from 1st August 1944, to 31st March 1945, was renewed, the Defence of India (Amendment) Ordinance, 1944, XXVI of 1944 had come into force and under that Ordinance a permit could be issued for any specified period not exceeding five years and if the Provincial Government so directed by general or special order, without complying with the procedure. laid down in section

57. The question to be decided therefore is whether the several renewals in this case were made under the Motor Vehicles Act as modified by the two Ordinances. Since the respondent company has claimed for the permits a life longer than that stated in them, the burden is on it to show that they were not issued in exercise of the powers which had been given by the Ordinances to the Regional Transport Authority. On this part of the case there is no evidence and there is nothing to show that the renewals which were made from time to time after the coming into force of Ordinance XXIII of 1942, were not temporary renewals but renewals under section 58 in compliance with the procedure provided by section

57. Nor is there any proof that in the matter of these renewals the Govern ment had issued any direction dispensing with the compliance of the procedure of section

57. As we have said these were war times and the fact that all renewals after 27th October 1942 were for less than three years clearly indicates that the authorities were acting first under the Ordinance of 1942 and in the case of the last permit under the Ordinance of 1944. That permit was for the period from 1st August 1944 to 31st March 1945, and was thus for a "specified period" within the meaning of the Ordinance of 1944. The respondent company or the associating individuals were not therefore entitled to claim an automatic renewal for a period longer than the specified period. A license being a personal grant, when the permits of the associating individuals were trans ferred to the company, there was no recognition of succession to the original grant. It was a fresh grant, personal to the grantee, for a specified period, and valid only for that period and not for any longer period. As regards estoppel, all that need be said is that estoppel does not create a cause of action unless the conduct of the representor amounts to fraud or constitutes a contract. A mere statement of intention to do something in future does not create any estoppel. A representation in order to amount to an estoppel must relate to an existing fact or a past event and must be something more than a mere promise to do something in the future. In the present case, what has been emphasized is that the associating individuals had been misled because they were told that if they formed themselves into a company, the company would be allowed to operate. It is not alleged that there was a definite promise which on being accepted constituted an enforceable agreement, and that the claim is for compensation for the breach of a contract. In the plaint which is a carefully worded document no reference is to be found to any agreement or contract and all that is stated is that the Government and the Regional Transport Authority persuaded the associating individuals to start or joint a company and held out to them the assurance that the company would be permitted to func tion as a transport company. There is a good deal of confusion in the plaint on this part of the case and the distinction between the associating individuals and the company seems to have been entirely overlooked. The promise or the assurance, assuming there was a promise or an assurance, was held out to the associating individuals but this assurance or promise is being availed of by an entirely different entity, namely, a joint stock company which consists not only of the associating individuals, but also of other persons. The plaint states, "The defendants by their declarations and acts intentionally caused the plaintiff to believe that if the `associating individuals' formed themselves into a limited liability company, `the company' will after incorporation have the right to use its transport vehicles, on Rawalpindi-Kohala-Srinagar route, on the strength of the permits transferred from the name of the `associating individuals' to that of the Company. `The Company' believed the above declarations to be true, and acted upon the said belief. The defendants cannot be allowed in this suit to deny the plaintiff's claim." This allegation would perhaps have been relevant if the suit bad been by the associating individuals in their individual capacity on the ground of fraud because the declarations were made to them and not to the company, but there can be no question of the company believing the above declarations to be true because the company came into existence in consequence of the declarations made to the individuals. There is, therefore, no question of any estoppel operating against the Government and in favour of the respondent company. Nor can the associating individuals success fully establish estoppel because a representation in order to amount to estoppel must relate to an existing fact, circumstance or thing or any past event and a mere statement of intention to do something in future is not such a representation as would give rise to an estoppel. Mere promises de futuro are not binding on the promisor unless they amount to a contract. Between a statement of present intention to act in a certain manner and an undertaking or engage ment so to act there is a fundamental distinction; the former neither creates an estoppel nor is actionable at law except for fraud, whereas the latter is enforceable as a contract. Where it is possible for a party to succeed if he can establish a representation which the other party will be stopped from contradicting, but the state ment on which he relies is no more than a promise de futuro, he has always been left without any remedy, however immoral or reprehensible the conduct of the representor may be. We have thus no doubt that all references to estoppel in the plaint and the arguments were misconceived and irrelevant and that, in the circum stances proved, there was no estoppel to found either an actionable claim by the respondent company or to preclude the appellant from acting contrary to the promise it had held out. We allow this appeal, set aside the decrees of the Courts below and dismiss the suit with costs. K. M. A./A. H. Appeal allowed.