Decision

Decision for Pure Veg Ltd

Published 22 April 2022

0.1 WEST MIDLANDS TRAFFIC AREA

1. DECISION OF THE TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD ON 8 MARCH 2022

2.1 OPERATOR: PURE VEG LTD LICENCE OD1128358

3. Background

Pure Veg Ltd holds a restricted goods vehicle operator licence, granted in 2015. The initial authorisation was for three vehicles: this was increased to five vehicles in September 2020. The directors of the company are Amandeep Singh Kahlar and Harpreet Kaur. The authorised operating centre is at Unit 8 Credenda Road, West Bromwich B70 7JE.

The nature of the company’s business, according to Companies House records, is “other retail sale of food in specialised stores”. On the application form for the operator licence, signed in March 2014, director Amandeep Singh Kahlar wrote that the company was involved in the catering sector.

4. DVSA report

In February 2022 I received a report from DVSA traffic examiner Adrian Prior. He stated that all of the vehicles specified on Pure Veg Ltd’s licence were volumetric mixers, tippers or grab vehicles, which appeared to be unusual vehicles to be in the service of a company in the catering trade.

TE Prior’s report contained a table setting out the various vehicles which had been specified on Pure Veg’s licence during the period 1 March to 30 June 2021. Of the 10 vehicles which were specified on Pure Veg’s licence for some or all of that period, all ten were registered to Master Construction Products Ltd, a company whose licence I had revoked with effect from 21 October 2020 after a public inquiry in September 2020 had found continuing very poor maintenance standards (the company had a long history of non-compliance). I had also indefinitely disqualified Master Construction Products Ltd from holding an operator’s licence.

TE Prior found that the vehicles were the subject of “hire agreements” between Master Construction Products Ltd and Pure Veg Ltd. Under the arrangements, Master Construction Products hired the vehicles - with drivers - to Pure Veg Ltd for a fixed sum per week irrespective of mileage. The hire agreements each consisted of only one page of A4 paper and were “open” in duration. They did not contain the detail common in hire agreements with normal vehicle rental companies.

TE Prior also reported that he had visited Pure Veg’s authorised operating centre in West Bromwich but it was apparent that the company’s vehicles were not being parked there and it was not being used as an operating centre. By contrast, when he had visited the premises of Master Construction Products Ltd in Pentos Drive Birmingham on 12 October 2021, he had found one of the vehicles on Pure Veg’s operator licence, YY07 CON. The director of Master Construction Products Ltd, Major Singh Ghag, stated that the vehicle was in for maintenance (although maintenance records presented later showed that the vehicle had had its six week safety inspection on 27 September, two weeks previously). The vehicle was issued with a prohibition for a defective tyre and non-functioning indicator. The day after TE Prior’s visit, vehicle YY07 CON was removed from Pure Veg’s licence.

Tachograph data showed that the vehicle had been driven while on Pure Veg’s licence by Major Singh Ghag and other drivers employed by Master Construction Products Ltd. Pure Veg did produce driver infringement reports, but these were not signed or dated by the drivers.

5. Public inquiry

Concerned that Pure Veg Ltd might have been acting as a front for the disqualified operator Master Construction Products Ltd, I called the company to a public inquiry. The call-up letter was sent on 7 February 2022, with the inquiry scheduled to take place in Birmingham on 8 March 2022.

On 23 February 2022 my clerk received an email from director Amandeep Singh Kahlar saying that he had been in India between 8 and 19 February 2022 and had only just seen the call-up letter. He had not yet gone through the letter in depth but he could see that it needed to be taken seriously. He asked for an adjournment in order to “digest the information and then obtain legal counsel”. I declined the request for an adjournment, on the grounds that there was a second director of the company, Harpreet Kaur, who could have dealt with the call-up letter in Mr Kahlar’s absence abroad. The company should have had measures in place to deal with communications from the regulatory authorities; after all, the company had clearly had no problem in continuing to operate vehicles during Mr Khalar’s absence.

On 1 March 2022 my clerk received a further email from Mr Khalar. He pointed out that the company’s correspondence address was his personal residence and that the other director had not had access to this during his absence. Further, the other director did not deal with administration and had no role in any aspect of the operator licence or transport either. Additionally, Mr Kahlar had now received a long-awaited xxxxxxx appointment for the morning of 8 March. He repeated his request for an adjournment.

I considered the request carefully. I noted that Mr Kahlar had returned to the UK on 19 February, 17 days before the public inquiry date. I considered that this was sufficient notice, especially as the company had failed to put in place measures to receive and deal with correspondence while he was away. I was sympathetic about Mr Kahlar’s xxxxxxx appointment, which I noted was in Cannock at 1030 on 8 March. I offered to reschedule the inquiry to the afternoon of that day, noting also that the other director was equally responsible for the company and could quite well represent it. Mr Kahlar did not feel able to agree to this suggestion,xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. Mr Kahlar decided instead to present a bundle of evidence to the inquiry, which he delivered to my office on 7 March. He told my clerk that “I have provided detailed information and I believe there is enough content for the TC to make the right decision in my absence”.

The bundle provided by Pure Veg to me, for which I was grateful, contained the following documents:

• a submission from Amandeep Singh Kahlar in which he stated that, although not agreeing with all the assumptions in TE Prior’s report, he accepted that “the setup of my operation may also not be entirely correct”. Specialist transport solicitors whom he had consulted had “raised concerns about the way I have set up and run my licence”. As well as running Pure Veg Ltd he was also a silent partner in Master Construction Products Ltd, having been a long-standing friend of Major Singh Ghag. Mr Kahlar was also involved in property development and from time to time had used the services of Master Construction Products Ltd to provide groundworks services for his projects. He had looked into acquiring vehicles so that Pure Veg could carry out these works under its licence but had found them too expensive and had thus decided to hire vehicles from Master Construction Products from time to time. The hire costs incurred by Pure Veg Ltd were deducted from dividends which Master Construction Products [I noted that in an appendix to his submission Mr Kahlar stated that “for a number of years (during Covid) no excess funds [ie dividends] have been distributed but kept within Master Construction Products to cover hard times”. In other words, the vehicle hire payments had never since the revocation of Master Construction Products’ licence in October 2020 either been made or deducted from (non-existent) dividend payments.] Mr Kahlar was insistent in his submission that Pure Veg Ltd had full control over the vehicles on its licence and instructed the drivers. Pure Veg had paid for the fuel and parts needed, had arranged maintenance and had downloaded and monitored drivers hours. It had operated on this business model since 2015, well before the revocation of the Master Construction Products licence.

• Bank statements covering the period 1 November 2021 to 31 January 2022;

• a video showing that YY07 CON had been recovered by a Recovery company to Master Construction Products’ premises on 12 October 2021 as it had broken down. Mr Kahlar explained that it was natural for the vehicle to be recovered to the location of its owner and maintainer: Pure Veg Ltd’s vehicles were normally kept at its own authorised operating centre.

The inquiry was held in Birmingham on 8 March 2022, in parallel with inquiries into Jay 10 Ltd and Intact Group (UK) Ltd, both of which companies had also been operating vehicles hired with drivers from Master Construction Products Ltd. As expected, nobody from Pure Veg Ltd appeared.

6. Further information

I therefore did as suggested by Mr Kahlar and attempted to reach a decision on the basis of the written evidence. However, I found that the submission made by Mr Kahlar invited further questions. I therefore asked my clerk to reconvene the inquiry on 6 April 2022 and meanwhile put to him the following questions in writing:

• Why do the bank statements of Pure Veg Ltd show few (or no) transactions relating to the operation of HGVs (fuel, parts etc)?

• Has Pure Veg Ltd ever operated any vehicles carrying vegetables or other food?

• What is the entity through which he conducts his property business? Is it a separate company?

• Is there any concrete evidence of any payment by Pure Veg Ltd to Master Construction Products Ltd for the hire of the vehicles? Or is it the case that the arrangement was just informal whereby the cost of the hire was to be offset by reductions in dividends from Master Construction Products? When did those dividends cease? Is Pure Veg Ltd a shareholder of Master Construction Products Ltd?

Mr Kahlar duly responded to these questions:

• In answer to question i) he stated that parts were generally purchased by Master Construction Products as they repaired the vehicles. Any parts purchased by Pure Veg Ltd and all fuel had been paid for in cash.

• The answer to the second question was no. Suppliers could deliver far more economically than Pure Veg could.

• The property business was conducted through other companies in which he had a stake but no directorships;

• Mr Kahlar accepted that Pure Veg had never made any actual payments to Master Construction Products. It was indeed the case that there was an informal agreement to offset amounts Pure Veg owed by reducing the dividend payable by Master Construction Products. Dividends continued to be paid [this directly contradicted Mr Kahlar’s earlier association that dividends had ceased in recent years]. Pure Veg was not a shareholder in Master Construction Products: the shareholding was a personal one held by Amandeep Kahlar.

These answers raised further serious problems in my mind. Even if one accepts Mr Kahlar at his word (which I am very far from doing) that the vehicles on the Pure Veg licence were used in support of property businesses in which he had an interest, they clearly should not have been, as Pure Veg only has a restricted licence and its vehicles cannot carry concrete etc for other businesses. Further, it would not have been possible to offset hire payments owed by Pure Veg to Master Construction Products by a reduction in dividend payment by Master Construction Products, because Pure Veg does not own any shares in Master Construction Products. Mr Kahlar’s answers only served to confirm my strong suspicion that Pure Veg was a flag of convenience for continued operations by Master Construction Products.

The inquiry reconvened at 1500 hours on 6 April 2022. Neither Amandeep Kahlar nor his fellow director Harpreet Kaur attended. I therefore proceeded to determine the issues on the evidence available.

7. Findings

It is quite clear to me from the above that the so-called hire arrangement between Pure Veg Ltd and Master Construction Products Ltd was a complete fiction. The “hire agreements” were not worth the paper they were written on, as in reality no money or any other form of consideration ever changed hands between Pure Veg and Master Construction Products. The vehicles on the Pure Veg licence were owned and operated by Master Construction Products Ltd and were driven by its drivers, in total defiance of the revocation of its own licence and that company’s disqualification from operating. Master Construction Products has been aided and abetted in this deception by Amandeep Kahlar, who has told me a series of lies about the operation to try to conceal what was really happening. He has also tried to evade his responsibility by failing to attend the public inquiry on two occasions (or to ask the other director to attend).

In consequence, I find that Pure Veg Ltd is not fit to hold an operator’s licence (Section 26(1)(h) and 13B of the 1995 Act refer).

In reaching this finding I did consider the Priority Freight question of how likely it is that the operator would comply in the future. I consider that this is extremely unlikely, given Mr Kahlar’s record of deception as outlined above. This tends to posit an affirmative answer to the Bryan Haulage question of whether the company deserves to go out of business. In actual fact this is unlikely, as by Mr Kahlar’s own admission, Pure Veg does not make any use of HGVs for its food business. If it were however to go out of business, this would be a merited outcome, as the company has deliberately facilitated continued operations by a banned operator.

8. Decisions

8.1 Licence revocation

The licence is revoked with effect from 0001 hours on 1 May 2022.

8.2 Disqualification of Pure Veg Ltd and of its directors

For the reasons outlined above, I further conclude that Pure Veg Ltd and its directors Amandeep Singh Kahlar and Harpreet Kaur should be disqualified under Section 28 from holding or obtaining an operator’s licence in the future. Because the company chose not to attend the inquiry and offer any mitigating factors for or explanation of its conduct, I am disqualifying both it and the directors indefinitely. The directors may however apply to appear at a hearing before a traffic commissioner to present a case for the cancellation or time-limiting of this disqualification. Given the gravity of their conduct, I would not expect the disqualification to be reduced to fewer than five years.

Nicholas Denton

Traffic Commissioner

6 April 2022