HARMAN SINGH AND OTHERS vs. REGIONAL TRANSPORT AUTHORITY, CALCUTTA, AND OTHERS.

Case Analysis

HARMAN SINGH AND OTHERS vs. REGIONAL TRANSPORT AUTHORITY, CALCUTTA, AND OTHERS.

April 21, 2025

A) ABSTRACT / HEADNOTE

The Supreme Court of India in Harman Singh and Others v. Regional Transport Authority, Calcutta and Others ([1954] SCR 371), adjudicated on the constitutional validity of a notification permitting the issuance of taxi permits for smaller capacity vehicles and fixing a reduced fare for them. The appellants, existing operators of larger capacity taxis, contended that this measure infringed their fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. They asserted that the competition introduced by smaller and cheaper taxis would adversely affect their businesses.

The Court held that the action of the Regional Transport Authority (RTA) was a legitimate policy decision based on rational classification. It ruled that the measure neither violated Article 14 (equality before law) nor Article 19(1)(g) (freedom to carry on trade or business). The judgment emphasized that economic competition alone does not constitute a violation of fundamental rights unless coupled with bad faith or unreasonable classification. The introduction of small taxis, fixed with lower tariffs for public benefit, was a reasonable classification not amounting to discrimination.

This ruling affirms the scope of constitutional protections under Article 19(1)(g), distinguishing between legal interference with business and legitimate policy-driven competition. It also clarifies the Court’s approach to Article 14, favoring reasonable classification over rigid formal equality.

Keywords: Article 14, Article 19(1)(g), Small Taxis, Rational Classification, Economic Competition, Regional Transport Authority, Fundamental Rights

B) CASE DETAILS

i) Judgement Cause Title: Harman Singh and Others v. Regional Transport Authority, Calcutta and Others

ii) Case Number: Civil Appeal No. 112 of 1953

iii) Judgement Date: 24 November 1953

iv) Court: Supreme Court of India

v) Quorum: Patanjali Sastri C.J., Mehr Chand Mahajan, S.R. Das, Ghulam Hasan, Jagannadhadas JJ.

vi) Author: Mahajan, J.

vii) Citation: [1954] SCR 371

viii) Legal Provisions Involved:

Article 14, Article 19(1)(g) of the Constitution of India
Section 42, Section 51 of the Motor Vehicles Act, 1939
Rule 179 of the Bengal Motor Vehicles Rules

ix) Judgments overruled by the Case (if any): None

x) Case is Related to which Law Subjects: Constitutional Law, Administrative Law, Transport and Motor Vehicles Law, Regulatory Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This case arose in the post-independence regulatory transformation of public transportation systems in Calcutta, governed by the Motor Vehicles Act, 1939. The Regional Transport Authority (RTA) had traditionally permitted taxis of higher horsepower (22-30 HP) and maintained a fixed tariff. In May 1952, the RTA issued a notification inviting applications for permits to operate lower horsepower taxis (10-19 HP) and later amended Rule 179 of the Bengal Motor Vehicles Rules, introducing a separate lower tariff for these small taxis. Taxi unions and larger cab operators saw this as undercutting their business.

The appellants approached the Calcutta High Court under Article 226 for a writ of prohibition. The High Court dismissed the petition. A certificate under Article 132(1) allowed the matter to be heard by the Supreme Court, raising pivotal issues on the constitutional guarantee of equal treatment and trade freedom vis-à-vis state regulation and classification.

D) FACTS OF THE CASE

The appellants were operators of large taxis (22–30 HP), governed by a tariff of Re. 1 for the first mile and 2 annas per subsequent one-sixth mile, fixed in 1944 and continued by 1951 notification. In 1952, the RTA invited applications for permits for smaller taxis (10–19 HP) with a provisional lower fare structure of 8 annas for the first mile and 2 annas per quarter mile thereafter.

Following this, 48 permits were granted to small taxi operators. Apprehending loss due to competitive fares, appellants filed a writ under Article 226 claiming infringement of rights under Article 14 (equal protection) and Article 19(1)(g) (freedom to carry on business). They claimed that the fixed minimum fare for big taxis disallowed them from matching the cheaper fare of smaller taxis, thus rendering them commercially unviable.

The High Court dismissed the petition, affirming rational classification and absence of restriction on business activity. The appeal was brought before the Supreme Court.

E) LEGAL ISSUES RAISED

i. Whether issuance of permits to small taxis with a lower tariff violates Article 14 by discriminating between similar service providers.

ii. Whether fixing a lower fare for small taxis violates the appellants’ fundamental right under Article 19(1)(g) to practice any occupation or business freely.

iii. Whether the appellants’ inability to charge competitive fares due to statutory fare fixation infringes their trade liberty.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i. The counsels for Petitioner / Appellant submitted that:

The fare disparity and inability to revise fares downward constituted a constructive prohibition of their trade. The fixed fare under Rule 179 restricted fare flexibility. Consequently, the introduction of cheaper taxis created a market imbalance, impairing their business to the extent of threatening closure. They argued that this constituted a de facto deprivation of trade freedom under Article 19(1)(g).

They emphasized that while the Constitution does not ensure market profitability, it guarantees an environment where fundamental rights like occupation can be exercised meaningfully. The appellants argued that unequal conditions for the same transport activity violated the right to equality under Article 14, asserting that classification based on vehicle HP lacked rational nexus with fare structure or public interest.

Reliance was placed on Chintaman Rao v. State of Madhya Pradesh, AIR 1951 SC 118, where arbitrary restrictions on beedi manufacturing were struck down under Article 19(1)(g). The appellants analogized their case, stating the state-imposed fare rigidity combined with new competition rendered their trade unviable and infringed constitutional protections.

G) RESPONDENT’S ARGUMENTS

i. The counsels for Respondent submitted that:

The respondents argued that state regulation introducing small taxis aimed at public benefit. The fare structure was rationally related to engine size, fuel consumption, and operating costs. The classification between small and big taxis had a clear rationale in terms of economy and operational viability.

They highlighted that Article 19(1)(g) protects the right to carry on business but not the right to eliminate competition. The law does not guarantee profits, only opportunity. The appellants remained free to operate within their permits and were not denied business licenses. Competition, even if it affects income, is not unconstitutional.

The counsel cited State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699, emphasizing that state regulation in public interest, even if it affects private trade, is constitutional unless arbitrary or mala fide. They asserted that the absence of bad faith or discriminatory intent in the policy undermined the appellants’ challenge.

H) RELATED LEGAL PROVISIONS

i. Article 14 of the Constitution of India: Guarantees equality before the law and prohibits arbitrary classification unless backed by a rational nexus to the legislative objective. Here, differentiation based on engine power and corresponding tariff was held reasonable.

ii. Article 19(1)(g) of the Constitution of India: Guarantees all citizens the right to practise any profession, or to carry on any occupation, trade or business. The Court emphasized this does not ensure freedom from competition or guarantee of profit.

iii. Section 42 of the Motor Vehicles Act, 1939: Requires vehicles to be operated under permits, ensuring regulated use of transport.

iv. Section 51 of the Motor Vehicles Act, 1939: Empowers the state to make rules regulating the transport sector, including fare fixation.

v. Rule 179 of the Bengal Motor Vehicles Rules: Specifies fare structures and was amended to accommodate new classifications for small taxis.

H) JUDGEMENT

a. RATIO DECIDENDI

i. The Court ruled that competition resulting from a policy decision does not violate Article 19(1)(g). Existing permit holders retain their occupation rights, and no law mandates fare parity across different vehicle categories. The classification between small and large taxis, based on engine capacity and fare structure, is constitutionally valid under Article 14.

b. OBITER DICTA

i. The Court noted that economic hardship due to policy change, without bad faith or irrationality, cannot constitute grounds for constitutional challenge. It observed that beneficial regulations must not be stifled by rigid formalistic interpretations of equality.

c. GUIDELINES

State may classify services and fix differential tariffs based on logical and economic reasoning.
Right under Article 19(1)(g) does not extend to a monopoly or protection from fair competition.
Regulatory flexibility is essential in balancing public interest and private enterprise.

I) CONCLUSION & COMMENTS

The Supreme Court’s judgment in this case marks a crucial point in the jurisprudence on economic rights and regulatory freedom. By upholding the state’s power to introduce economically viable reforms, the Court ensured that public interest does not get curtailed by private monopolistic tendencies. The ruling highlights a pro-regulatory interpretation of the Constitution, where competition is welcomed, and rational classifications are upheld in the interest of economic democratization.

This case remains a landmark in setting boundaries to Article 14 and 19 challenges against market regulation. It also serves as a precedent to counter protectionist arguments under the garb of fundamental rights, reinforcing the doctrine that the Constitution is not a shield for market insulation but a framework for equitable progress.

J) REFERENCES

a. Important Cases Referred