LexThe Road Transport Corporation Act, 1950
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THE ROAD TRANSPORT CORPORATIONS ACT, 1950
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ARRANGEMENT OF SECTIONS
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CHAPTER I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
ROAD TRANSPORT CORPORATIONS
3. Establishment of Road Transport Corporations in the States.
4. Incorporation.
5. Management of Corporation and Board of Directors.
6. Disqualifications for being chosen as, or for being, a Director of a Corporation.
7. Resignation of office by the Chairman or a Director.
8. Removal of Chairman and members from office.
9. Vacancies amongst members or defect in the constitution not to invalidate acts or proceedings of a
Corporation.
10. Temporary association of persons with a Board for particular purposes.
11. Meetings of Boards.
12. Power to appoint committees and delegate functions.
13. Authentication of orders and other instruments.
14. Officers and servants of the Corporation.
15. Managing Director, Chief Accounts Officer and Financial Adviser.
16. General disqualification of all officers and servants.
17. Appointment of Advisory Council.
CHAPTER IIA
SUBSIDIARY CORPORATIONS
17A. Establishment of subsidiary corporations.
CHAPTER III
POWERS AND DUTIES OF CORPORATION
18. General duty of Corporation.
19. Powers of Corporation.
19A. Disposal of unclaimed articles and property.
19B. Corporation to obtain the approval of the Central Government in certain cases.
20. Extension of the operation of the road transport service of a Corporation to areas within another
State.
21. Carriage of mails.
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CHAPTER IV
FINANCE, ACCOUNTS AND AUDIT
SECTIONS
22. General principle of Corporation’s finance.
23. Capital of the Corporation.
24. Additional capital of the Corporation.
25. Guarantee by the State Government.
26. Borrowing powers.
27. Fund of the Corporation.
28. Payment of interest and dividend.
29. Provision for depreciation and reserve and other funds.
30. Disposal of net profits.
31. Power of the Corporation to spend.
32. Budget.
33. Accounts and audit.
CHAPTER V
MISCELLANEOUS
34. Directions by the State Government.
35. Returns and reports.
36. Power to order inquiries.
37. Power to control a part of the undertaking of a Corporation.
38. Power to supersede a Corporation.
39. Liquidation of a Corporation.
40. Compensation for acquisition of road transport undertakings.
41. Omitted
42. Power of entry.
43. Directors, Officers and other employees of a Corporation to be public servants.
44. Power to make rules.
45. Power to make regulations.
45A. Every rule and regulation to be laid before State Legislature.
46. Penalty for breach of rules.
47. Special provisions relating to Bombay.
47A. Special provision for reconstitution or dissolution of certain Corporations.
48. Transitional provision relating to Bombay State Road Transport Corporation.
CHAPTER VI
SPECIAL PROVISIONS APPLICABLE TO THE UNION TERRITORY OF DELHI
49. Prosecution and cognizance of offences.
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SECTIONS
50. Appointment of Magistrates.
51. Composition of offences.
52. Limitation of time for prosecution.
53. Power of magistrate to hear cases in absence of accused when summoned to appear.
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THE ROAD TRANSPORT CORPORATIONS ACT, 1950
ACT NO. 64 OF 1950
[4th December, 1950.]
An Act to provide for the incorporation and regulation of Road Transport Corporations.
BE it enacted by Parliament as follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement .—(1) This Act may be called the Road Transport
Corporations Act, 1950.
(2) It extends to the whole of India 1***:
2[Provided that on and from the commencement of the Delhi Road Transport Laws (Amendment)
Act, 1971, this Act, as amended by the said Act, shall extend to, and be in force in, the Union territory of
Delhi:]
3[Provided further that on and from the commencement of the Road Transport Corporations
(Amendment) Act, 1982, this Act , as amended by the said Act, shall extend to the Union territory of
Mizoram.]
4* * * * *
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “ancillary service ” means any subsidiary service which provides amenities or facilities to
persons making use of any road transport service of a Corporation;
5[(aa) “Board” means the Board of Directors of a Corporation;]
(b) “Corporation” means a Road Transport Corporation established under section 3;
5[(bb) “Director” means a member of the Board;]
(c) “extended area” means any area or route to which the operation of any road transport service
of a Corporation has been extended in the manner provided in section 20;
(d) “prescribed” means prescribed by rules made under this Act;
(e) “road transport service ” means a ser vice carrying passengers or goods or both by road in
vehicles for hire or reward;
(f) “vehicle” means any mechanically propelled vehicle, used or capable of being used for the
purpose of road transport, and includes a tram-car, a trolly-vehicle and a trailer;
(g) words and expressions used but not defined in this Act and defined in the Motor Vehicles
Act, 1939 (4 of 1939), have the meaning assigned to them in that Act;
6* * * * *
1. The words “except the Union territory of Delhi” omitted by Act 71 of 1971, s. 2 (w.e.f. 3-9-1971).
2. The proviso added by s. 2, ibid. (w.e.f. 3-11-1971).
3. Ins. by Act 63 of 1982, s. 2 (w.e.f. 13-11-1982).
4. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-11-1971).
5. Ins. by Act 63 of 1982, s. 16 and the Schedule (w.e.f. 13-11-1982).
6. Omitted by A.O. (No. 3), 1956.
5
CHAPTER II
ROAD TRANSPORT CORPORATIONS
3. Establishment of Road Transport Corporations in the States .—The State Government having
regard to—
(a) the advantages offered to the public, trade and industry by the development of road transport;
(b) the desirability of co-ordinating any form of road transport with any other form of transport;
(c) the desirability of extending and improving the facilities for road transport in any area and of
providing an efficient and economical system of road transport service therein,
may, by notification in the Official Gazette, establish a Road Transport Corporation for 1[the whole or any
part of the Union territory of Delhi] under such name as may be specified in the notification.
4. Incorporation.—Every Corporation shall be a body corporate by the name notified under section 3
having perpetual succession and a common seal, and shall by the said name sue and be sued.
2[5. Management of Corporation and Board of Directors .—(1) The general superintendence,
direction and management of the affairs and business of a Corporation shall vest in a Board of Directors
which, with the assistance of its committees and Managing Director, may exercise all such powers and do
all such acts and things as may be exercised or done by the Corporation.
(2) The Board shall consist of a Chairman and such other Directors, being not less than five and not
more than seventeen, as the State Government may think fit to appoint.
(3) The State Government may, if it so thinks fit appoint one of the other Directors a s the
Vice-Chairman of the Board.
(4) Rules made under this Act shall provide for the representation, both of the Central Govern ment
and of the State Government concerned, on the Board in such proportion as may be agreed to by both t he
Government and of appointment by each Government of its own re presentatives thereto and where the
capital of a Corporation is raised by the issue of shares to other parties under sub -section (3) of
section 23, provision shall also be made for the representation of such shareholders on the Board and the
manner in which the representatives shall be elected by such shareholders.
(5) The term of office of and the manner of filling casual vacancies among the Directors shall be such
as may be prescribed.]
6. Disqualifications for being chosen as, or for being, a 3[Director of a Corporation ].—4[(1)] A
person shall be disqualified for being chosen as, or for being, a 3[Director of a Corporation]—
(a) if he is found to be a lunatic or a person of unsound mind; or
(b) if he has been adjudged insolvent; or
(c) if he has been convicted of an offence involving moral turpitude; or
(d) if he has, directly or indirectly, any inte rest in any subsisting contract made with, or in any
work being done for, the Corporation except as a shareholder (other than a director) in an
incorporated company, provided that where he is a shareholder he shall disclose to the State
Government the nature and extent of shares held by him in such company; or
(e) if he has any financial interest in any other road transport undertaking.
1. Subs. by Act 71 of 1971, s. 7(a) and the First Schedule, for “the whole or any part of the State” (w.e.f. 3-9-1971).
2. Subs. by Act 63 of 1982, s. 3, for section 5 (w.e.f. 13-11-1982).
3. Subs. by s. 4, ibid., for “member of a Corporation” (w.e.f. 13-11-1982).
4. Section 6 re-numbered as sub-section (1) thereof by Act 28 of 1959, s. 2 (w.e.f. 1-9-1959).
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1[(2) Nothing in clause ( d) of sub-section (1) shall be deemed to disqualify the 2[Managing Director]
of a Corporation for being chosen as, or for being, a 3[Director] thereof.]
4[(3) Nothing in clause (e) of sub-section (1) shall be deemed to disqualify,—
(a) any officer or other employee of the Government for being chosen as, or for being, a Director
of a Corporation;
(b) any officer or other employee of a Corporation for being chosen as, or for being, a Director of
another Corporation.]
7. Resignation of office by the Chairman or a 5[Director].—The Chairman or any other 5[Director]
of a Corporation may resign his office by giving notice in writing to the State Government and, on such
resignation being accepted by that Government, shall be deemed to have vacated his office.
8. Removal of Chairman and members from office .—6[(1)] The State Government may remove
from office the Chairman or any other 7[Director] of the Corporation who—
(a) is or becomes subject to any of the disqualifications mentioned in section 6; or
(b) without excuse sufficient in the opinion of the State Government is absent for more than four
consecutive meetings of the 8[Board].
9* * * * *
10[(2) The State Government may terminate the appointment of any Director after giving him notice
for such period (being not less than one month) as may be prescribed:
Provided that the appointment of a Director appointed by the Central Gov ernment shall not be
terminated under this sub-section without the concurrence of that Government.]
9. Vacancies amongst members or defect in the constitution not to invalidate acts or
proceedings of a Corporation. —No act or proceeding of a 11[Corporation or its Board] shall be invalid
by reason only of the existence of any vacancy 12[in its Board] or any defect in the constitution thereof.
10. Temporary association of persons with a 13[Board] for particular purposes.—(1) A 13[Board]
may associate with itself for any particular purpose in such manner as may be determined by regulations
made under this Act any person whose assistance or advice it may desire.
(2) A person associated with it by the 13[Board] under sub -section (1) for any purpose shall have a
right to take, part in the discussions of the 13[Board] relevant to that purpose, but shall not have a right to
vote at a meeting of the 13[Board].
11. Meetings of 14[Board].—(1) A 14[Board] shall meet at such times and places and shall, subject to
the provisions of sub -sections ( 2) and ( 3), observe such rules of procedure in regard to transaction of
business at its meetings as may be provided by regulations made under this Act:
Provided that the 14[Board] shall meet at least once in every three months.
1. Ins. by Act 28 of 1959, s. 2 (w.e.f. 1-9-1959).
2. Subs. by Act 63 of 1982, s. 4, for “Chief Executive Officer or General Manager” (w.e.f. 13-11-1982).
3. Subs. by s. 4, ibid., for “member” (w.e.f. 13-11-1982).
4. Ins. by s. 4, ibid. (w.e.f. 13-11-1982).
5. Subs. by s. 16 and the Schedule, ibid., for “member” (w.e.f. 13-11-1982).
6. Section 8 re-numbered as sub-section (1) thereof by s. 5, ibid. (w.e.f 13-11-1982)
7. Subs. by s. 5, ibid., for “member” (w.e.f. 13-11-1982).
8. Subs. by s. 5, ibid., for “Corporation” (w.e.f. 13-11-1982).
9. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
10. Ins. by Act 63 of 1982, s. 5 (w.e.f. 13-11-1982).
11. Subs. by s. 16 and the Schedule, ibid., for “Corporation” (w.e.f. 13-11-1982).
12. Subs. by s. 16 and the Schedule, ibid., for “amongst its members” (w.e.f. 13-11-1982).
13. Subs. by s. 16 and the Schedule, ibid., for “Corporation” (w.e.f. 13-11-1982).
14. Subs. by s. 16 and the Schedule, ibid., for “Corporation” (w.e.f. 13-11-1982).
7
(2) The person to preside at a meeting of a 1[Board] shall be the Chairman thereof, or in his
absence from any meeting , the Vice-Chairman, if any, or in the absen ce of both the Chairman and the
Vice-Chairman, 2[such Director as may be chosen by the Directors present] from among themselves to
preside.
(3) All questions at a meeting of a 1[Board] shall be decided by a majority of votes of the members
present, and in the case of equality of votes, the Chairman or, in his absence, any other person presiding
shall have a second or casting vote.
12. Power to appoint committees and delegate functions .—3[(1)] A 4[Board] may, from time to
time by resolution passed at a meeting—
(a) appoint committees 5[consisting of Directors] for performing such functions as may be
specified in the resolution;
(b) delegate to any such committee or to the 6[Chairman, Vice-Chairman, Chief Executive
Officer, the General Manager, the Deputy General Manager or the Chief Accounts Officer of the
Corporation] subject to such conditions and limitations, if any, as may be specified in the resolution,
such of its powers and duties as it may think fit;
(c) authorised the 7[Managing Director] 8[or any other officer of the Corporation] subject to such
such conditions and limitations, if any, as may be specified in the resolution to exercise such powers
and perform such duties as it may deem necessary for the efficient day -to-day administration of its
business.
9[(2) The Chairman, Vice-Chairman or Managing Director may delegate any of his powers and duties
duties [including powers and duties delegated to him under sub -section (1)] to any officer of the Corpo -
ration, and the officer to whom such powers and duties are delegated, shall exercise and perform such
powers and duties under the control and supervision of the Managing Director.]
10[13. Authentication o f orders and other instruments. —All orders and decisions of the Board
shall be authenticated by the signature of the Secretary or by any such other officer of the Corporation as
may be authorised in this behalf by the Board or under the regulations made under section 45 and all other
instruments issued by a Board shall be authenticated by the signature of the Managing Director or any
other officer of the Corporation authorised in like manner in this behalf.]
14. Officers and servants of the Corporation .—11[(1) Every Corporation shall have a Managing
Director, a Chief Accounts Officer and a Financial Adviser, appointed by the State Government:
Provided that the same person may be appointed as the Chief Accounts Officer and the Financial
Adviser.]
(2) A Corporation may appoint 12[a Secretary and such other officers and employees] as it consid ers
necessary for the efficient performance of its functions.
1. Subs. by Act 63 of 1982, s. 16 and the Schedule, for “Corporation” (w.e.f. 13-11-1982).
2. Subs. by s. 16 and the Schedule, ibid., for “such member as may be chosen by the members present” (w.e.f. 13-11-1982).
1982).
3. Section 12 renumbered as sub-section (1) thereof by s. 6, ibid. (w.e.f 13-11-1982).
4. Subs. by s. 6, ibid., for “Corporation” (w.e.f. 13-11-1982).
5. Subs. by s. 6, ibid., for “of its members” (w.e.f. 13-11-1982).
6. Subs. by Act 71 of 1971, s. 7(a) and the First Schedule, for “Chairman or Vice-Chairman” (w.e.f. 3-9-1971).
7. Subs. by Act 63 of 1982, s. 6, for “Chief Executive Officer or General Manager” (w.e.f. 13-11-1982).
8. Ins. by Act 28 of 1959, s. 3 (w.e.f. 1-9-1959)
9. Ins. by Act 63 of 1982, s. 6 (w.e.f. 13-11-1982).
10. Subs. by s. 7, ibid., for s. 13 (w.e.f. 13-11-1982).
11. Subs. by s. 8, ibid., for sub-section (1) (w.e.f. 13-11-1982).
12. Subs. by s. 8, ibid., for “such other officers and servants” (w.e.f. 13-11-1982).
8
1[(3) The conditions of appointment and service and the scales of pay of the officers and employees of
of a Corporation shall—
(a) as respects the Managing Director, the Chief Accounts Officer and the Financial Adviser, or,
as the case may be , the Chief Accounts Officer -cum-Financial Adviser, be s uch, as may be
prescribed, and
(b) as respects the other officers and employees, be such, as may, subject to the provisions of
section 34, be determined by regulations made under this Act.]
2[15. Managing Director, Chief Accounts Officer and Financial Adviser.—(1) The Managing
Director shall be the executive head of the Corporation and all othe r officers and employees of the
Corporation shall be subordinate to him.
(2) The Managing Director shall obtain the views of the Chief Accounts Officer and the Financial
Adviser or, as the case may be, the Chief Accounts Officer -cum-Financial Adviser, on every proposal
involving revenues, or expenditure from the fund, of the Corporation and shall cause such views to be
placed before the Board prior to the consideration of such proposal by the Board.]
16. General disqualification of all officers and servants .—No person who has directly or
indirectly, by himself or his partner or agent, any share or interest in any contract, by or on behalf of a
Corporation, or in a ny other road transport undertaking shall become or remain an 3[officer or other
employee] of the Corporation.
17. Appointment of Advisory Council.—The State Government may, after ascertaining the views of
the Corporation, by notification in the Official Gazette, constitute one or more Advisory Coun cils
consisting of such number of persons, on such terms, and for the purpose of advising the Corpora tion on
such matters, as may be specified in that notification.
4[CHAPTER IIA
SUBSIDIARY CORPORATIONS
17A. Establishment of subsidiary corporations .—(1) Where a Corporation (hereinafter in this
section referred to as the parent Corporation) is satisfied that it is expedient or necessary so to do for the
more efficient discharge of its functions under this Act, it may, with the concurrence of the State
Government and the Central Government, frame by notification in the Official Gazette a scheme or
schemes providing for the establishment of one or more subsidiary corporations.
(2) A scheme frame d under sub -section (1) shall specify the subsidiary corporation or corpora tions
which shall become established thereunder, the date or dates with effect from which they shall be so
established, the powers and functions of the parent Corporation which suc h subsidiary corporation or
corporations may exercise and discharge, the conditions and limitations subject to which such powers
may be exercised, the management of the affairs of each such subsidiary corporation by a Board of
Directors, the capital of each such subsidiary corporation and all other matters relating to such subsidiary
corporations corresponding to the various matters for which provisions have been made in this Act with
respect to the parent Corporation:
Provided that—
(a) no subsidiary corporation shall start operation on any new route without the previous approval
of the parent Corporation;
(b) the representatives of the Central Government on the Board of Directors of a subsidiary
corporation shall be in proportion to its contribution to the capital of the parent Corporation;
1. Subs. by Act 63 of 1982, s. 8, for sub-section (3) (w.e.f. 13-11-1982).
2. Subs. by s. 9, ibid., for section 15 (w.e.f. 13-11-1982).
3. Subs. by s. 16 and the Schedule, ibid., for “officer or servant” (w.e.f. 13-11-1982).
4. Ins. by s. 10, ibid. (w.e.f. 13-11-1982).
9
(c) the liability of the Central Government to provide contribution to the capital of the subsidiary
corporation or to the parent Corporation shall not be increased without the approval of the Central
Government;
(d) a subsidiary corporation shall have a Managing Director, a Chief Accounts Officer and a
Financial Adviser or a Chief Accounts Officer -cum-Financial Adviser, and such officers shall be
appointed by the State Government;
(e) the State Government and the paren t Corporation shall have power to give directions to a
subsidiary corporation in respect of any matter, including directions relating to recruitment conditions
of service and training of the employees of the subsidiary corporation, wages to be paid to such
employees, reserves to be maintained by the subsidiary corporation;
(f) the capital budget, the revenue budget and the annual development plans of a subsidiary
corporation shall be submitted for approval to the parent Corporation and where such budget or plan
involves any deficit, also to the State Government.
(3) Every subsidiary corporation established under a scheme framed under sub -section (1) shall be a
body corporate, by the name specified in the scheme having perpetual succession and a common seal and
shall by the said name sue and be sued.]
CHAPTER III
POWERS AND DUTIES OF CORPORATION
18. General duty of Corporation .—It shall be the general duty of a Corpor ation so to exercise its
powers as progressively to provide or secure or promote the provision of, an efficient, adequate,
economical and properly co -ordinated system of road transport services in the 1[Union territory of Delhi
or part thereof] for which it is established and in any extended area:
Provided that nothing in this section shall be construed as imposing on a Corporation, either directly
or indirectly, an y form of duty or liability enforceable by proceedin gs before any Court or Tribunal to
which it would not otherwise be subject.
19. Powers of Corporation .—(1) Subject to the provisions of this Act, a Corporation shall have
power—
(a) to operate road transport services in the 2[Union territory of Delhi] and in any extended area;
(b) to provide for any ancillary service;
(c) to provide for its employees suitable conditions of service including fair wages, establishment
of provident fund, living accommodation, places for rest and recreation and other amenities;
3[(d) to authorise the issue of passes to its employees and other persons either free of cost or at
concessional rates and on such conditions as it may deem fit to impose;
(e) to authorise the grant of refund in respect of unused tickets and concessional passes.]
(2) Subject to the provisions of this Act, the powers conf erred by sub -section ( 1) shall include
power—
(a) to manufacture, purchase, maintain and repair rolling stock, vehicles, appliances, plant, equip-
ment or any other thing required for the purpose of any of the activities of the Corporation referred to
in sub-section (1);
Explanation.—In this clause, the expression “manufacture” does not include the construction of
the complete unit of a motor vehicle except for purposes of experiment or research;
1. Subs. by Act 71 of 1971, s. 7(a) and the First Schedule, for “State or part of the State” (w.e.f. 3-9-1971).
2. Subs. by s. 7(a) and the First Schedule, ibid., for “State” (w.e.f. 3-9-1971).
3. Ins. by Act 28 of 1959, s. 4 (w.e.f. 1-9-1959)
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(b) to acquire and hold such property, both movable and immo vable, as the Corporation may
deem necessary for the purpose of any of the said activities, and to lease, sell or otherwise transfer
any property held by it;
(c) to prepare schemes for the acquisition of, and to acquire, either by agreement or compulsorily
in accordance with the law of acquisition for the time being in force in the 1[Union territory of Delhi]
and with such procedure as may be prescribed, whether absolutely or for any period, the whole or any
part of any undertaking of any other person to the extent to which the activities thereof consist of the
operation of road transport services in 2[that Union territory] or in any extended area;
(d) to purchase by agreement or to take on lease or under any form of ten ancy any land and to
erect thereon such buildings as may be necessary for the purpose of carrying on its undertaking;
(e) to authorise the disposal of scrap vehicles, old tyres, used oils, 3[any other stores of scrap
value, or such other stores as may be declared to be obsolete in the prescribed manner].
(f) to enter into and perform all such contracts as may be necessary for the performance of its
duties and the exercise of its powers under the Act;
(g) to purchase vehicles of such type as may be suitable for use in the road transport services
operated by the Corporation;
(h) to purchase or otherwise secure by agreement vehicles, garages, sheds, office buildings,
depots, land, workshops, equipment, tools, accessories to and spare parts for vehicles, or any other
article owned or possessed by the owner of any other undertaking for use thereof by the Corpo ration
for the purposes of its undertaking;
(i) to do anything for the purpose of advancing the skill of persons employed by the Corporation
or the efficiency of the equipment of the Corporation or of the manner in which that equipment is
operated, including the provision by the Corporation, and the assistance by the Corporation to others
for the provision of facilities or training, education and research;
(j) to enter into and carry out agreements with any person carrying on b usiness as a carrier of
passengers or goods providing for the carriage of passengers or goods on behalf of the Corporation by
that other person at a thorough fare or freight.
(k) to provide facilities for the consignment, storage and delivery of goods;
(l) to enter into contracts for exhibition of posters and advertising boards on and in the vehicles
and premises of the Corporation and also for advertisement on tickets and other forms issued by the
Corporation to the public;
(m) with the prior approval of the State Government to do all other things to facilitate the proper
carrying on of the business of the Corporation.
4[(n) to determine with the previous approval of the State Government, and in case of a road
transport service operated in any extended area, also with the previous approval of the Government of
the State within which such extended area is situated, fares and freights for the carriage of passengers
and goods in any road transport service provided by the Corporation.]
(3) Nothing in this se ction shall be construed as authorising a Corporation, except with the previ ous
approval of the State Government—
(i) to manufacture or maintain anything which is not required directly or indirectly for use for the
purpose of the undertaking of the Corporation or to repair, store, or provide any service for, any
vehicle which does not belong to the Corporation or is not used directly or indi rectly for the purpose
of its undertaking;
1. Subs. by Act 71 of 1971, s. 7(a) and the First Schedule, for “State concerned” (w.e.f. 3-9-1971).
2. Subs. by s. 7(a) and the First Schedule, ibid., for “that State” (w.e.f. 3-9-1971).
3. Subs. by Act 63 of 1982, s. 11, for “or any other stores of scrap value” (w.e.f. 13-11-1982).
4. Ins. by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 13-11-1971).
11
(ii) to purchase any vehicle for the purpose of sale to another person;
(iii) to sell or supply to any person lubricants, spare parts, or equipment for or accessories to,
vehicles;
(iv) to let vehicles on hire for the carriage of passengers or goods except as expressly provided by
or under this Act.
(4) Except as otherwise provided by this Act nothing in the foregoing provisions shall be construed as
authorising the Corporation to disregard any law for the time being in force.
(5) Where a Corporation acquires the whole or any part of an undertaking of any other person, th e
Corporation shall, in appointing its 1[officers and other employees] take into consideration the claims of
employees employed in that undertaking.
(6) The provisions of this section shall not be construed as limiting any power of a Corporation
conferred by or under any subsequent provision of this Act.
2[19A. Disposal of unclaimed articles and property. —(1) When any articles or goods have come
into the possession of a Corporation for carriage or otherwise and are not claimed by the owner or any
other person appearing to the Corporation to be entitled thereto, the Corporation shall, if such owner or
other person is known, cause a notice to be served upon him requiring him to remove the articles or goods
within seven days of the service of such notice.
(2) If such owner or other person is not known or the notice cannot be served upon him or he does not
comply with the requisition in the notice, the Corporation may, after the expiration of such period as may
be specified by regulation made under this Act, sell the articles or goods by public auction and shall, after
deducting from the sale -proceeds expenses for holding the sale or any amount which may be due to the
Corporation, credit the surplus sale -proceeds, if any, to the Fund of the Corporation; and th e
sale-proceeds so credited may be paid on demand to any person who establishes his right thereto in a
court of competent jurisdiction or within one year of such sale to the satisfaction of the Corporation.
19B. Corporation to obtain the app roval of the Central Government in certain cases. —In the
exercise of any of its powers under this Act, the Corporation shall not incur on any single work, service or
scheme or for any other purpose a capital expenditure of more than twenty -five lakhs of ru pees except
with the previous approval of the Central Government.]
20. Extension of the operation of the road transport service of a Corporation to areas within
another State .—(1) If a Corporation considers it to be expedient in the public interest to extend the
operation of any of its road transport services to any route or area situated within another State, it may,
with the permission of the State Government, negotiate w ith the Government of the other State regarding
the proposed extension.
(2) If the Government of the other State approves the proposed extension, the Corporation shall
prepare a scheme for the purpose and forward the same to the other Government for its consent, and after
such consent has been received, the Corporation may, with the previous approval of the State
Government, sanction the scheme.
(3) After the scheme has been so sanctioned, it shall be competent for the Corporation to extend the
operation of its road transport service to such route or area and when the operation of suc h service is so
extended, the Corporation shall operate the service on that route or in that area subject to the provisions of
any law in force in the other State within which such route or area is situated.
(4) The Corporation may, from time to time, alt er or extend the scheme sanctioned under
sub-section ( 2) by a supplementary scheme prepared and sanctioned in the manner provided in the
foregoing provisions of this section.
1. Subs. by Act 63 of 1982, s. 11, for “officers and servants” (w.e.f. 13-11-1982).
2. Ins. by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
12
21. Carriage of mails .—Notwithstanding anything contained in the Motor Vehicles
Act, 1939 (4 of 1939), a Corporation shall, if so required by the Central Government, carry mails at such
rates and on such terms and conditions as may be specified in this behalf by 1[that Government].
CHAPTER IV
FINANCE, ACCOUNTS AND AUDIT
22. General principle of Corporation’s finance.—It shall be the general principle of a Corporation
that in carrying on its undertaking it shall act on business principles.
23. Capital of the Corporation .—2[(1) The State Government may provide to a Corporation
established by th at Government any capital that may be required by the Corporation for the purpose of
carrying on its undertaking or for purposes connected therewith on such terms and conditions, not
inconsistent with the provisions of this Act, as that Government may determine.]
3[(2) The Corporation may, whether or not any capital is provided to it under sub -section (1), raise by
the issue of shares such capital (hereafter in this section referred to as the “authorised share capital”) as
may be authorised in this behalf by the State Government:
Provided that where any capital is provided to the Corporation under sub-section (1), no capital may
be raised under this sub-section without the previous approval of the Central Government.
(2A) Any capital raised under sub -section (2) with the previous approval of the Central Government
may be,—
(a) in addition to the capital provided to the Corporation under sub-section (1);
(b) subscribed to by the Central Government or the State Government, as the case may be, by
converting the whole or any part of the capital provided [whether before or after the commencement
of the Road Transport Corporations (Amendment) Act, 1982] to the Corporation by that G overnment
under sub-section (1).]
(3) The 4[authorised share capital] of the Corporation shall be divided into such number of shares as
the State Government may determine; and the number of shares which shall be subscribed by the State
Government, 5*** and other parties (including persons whose undertakings have been acquired by the
Corporation) shall also be determined by the State Government 5***.
(4) The allotment of shares to other parties mentioned in sub -section ( 3) shall be made by the
Corporation in such manner as may be prescribed.
(5) The shares of the Corporation shall not be transferable except in accordance with the rules made
under this Act.
(6) The Corporation may at any time, with the previous approval of the State Government, redeem the
shares issued to the other parties under sub-section (4) in such manner as may be prescribed.
24. Additional capital of the Corporation .—If, after the issue of shares under section 23 a
Corporation requires any further capital, the Corporation may, with the previous sanction of the State
Government, raise such additional capital by the issue of new shares and the provisions of sub -sections
(2), 6[(2A)] (3), (4), (5) and (6) of the said section shall apply to the issue of such shares.
25. Guarantee by the State Government .—The shares of a Corporation shall be guaranteed by the
State Government as to the payment of the principal and the payment of the annual dividend at such
minimum rate as may be fixed by the State Government by notification published in the Official Gazette
at the time of issuing the shares.
1. Subs. by Act 71 of 1971, s. 7( a) and the First Schedule, for “ The Central Government in consultation with the State
Government” (w.e.f. 13-11-1971).
2. Subs. by s. 7 (a) and the First Schedule, ibid., for sub-section (1) (w.e.f. 13-11
3. Subs. by Act 63 of 1982, s. 12, for sub-section (2) (w.e.f. 13-11-1982).
4. Subs. by s. 12, ibid., for “authorised capital” (w.e.f. 13-11-1982).
5. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
6. Ins. by Act 63 of 1982, s. 16 and the Schedule (w.e.f. 13-11-1982).
13
1[26. Borrowing powers.—A Corporation may, with the previous approval of the State Gov ernment,
borrow money for the purpose of raising its working capital or meeting any expenditure of a capital
nature in the open market or from a corresponding new bank constituted under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) , a State Finance
Corporation, established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951), the
Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation
Act, 1948 (15 of 1948), the Indust rial Development Bank of India, established under section 3 of the
Industrial Development Bank of India Act, 1964 (18 of 1964) , the Life Insurance Corporation of India,
established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956) , o r any other
financial institution providing credit which is subject to the control of the Reserve Bank of India.]
27. Fund of the Corporation.—(1) Every Corporation shall have its own fund and all receipts of the
Corporation shall be carried thereto and all payments by the Corporation shall be made therefrom.
(2) Except as otherwise directed by the State Government, all moneys belonging to that fund shall be
deposited in the Reserve Bank of India or with the agents of the Reserve Bank of India , 2[or with the
corresponding new banks constituted under section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 (5 of 1970), or section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980 (40 of 1980)] or invested in such securities as may be approved by
the State Government.
28. Payment of interest and dividend .—(1) Where 3[the whole or part of the capital of a
Corporation] is provided by the Central Government and the State Government under sub -section (1) of
section 23, the Corporation shall pay interest on such capital at such rate as may, from time to time, be
fixed by the State Government 4*** and such interest shall be deemed to be a part of the expenditure of
the Corporation.
(2) Where the Corporation 5[raises the whole or any part of its capital] by issue of shares, it shall pay
dividend on such shares at such rate as may, from time to time, be fixed by the Corporation, subject to
any general limitations which may have been imposed by the State Government 4***, and such dividend
shall be deemed to be a part of the expenditure of the Corporation.
29. Provision for depreciation and reserve and other funds .—(1) A Corporation shall make such
provisions for depreciation and for reserve and other funds as the State Gove rnment may, from time to
time, direct.
(2) The management of the said funds, the sums to be carried from time to time to the credit thereof
and the application of the moneys comprised therein shall be determined by the Corporation:
Provided that no fund shall be utilised for any purpose other than that for which it was created
without the previous approval of the State Government.
30. Disposal of net profits .—After making provision for payment of interest and dividend under
section 28 and for depreciation , reserve and other funds under section 29, a Corporation may utilise such
percentage of its net annual profits as may be specified in this behalf by the State Government for the
provision of amenities to the passengers using the road transport services, w elfare of labour employed by
the Corporation and for such other purposes as may be prescribed with the previous approval of the
Central Government, 6[and out of the balance such amount as may, with the previous approval of the
State Government 4***, be spe cified in this behalf by the Corporation, may be utilised for financing the
expansion programmes of the Corporation and the remainder, if any, shall be made over to the State
Government for the purpose of road development].
1. Subs. by Act 63 of 1982, s. 13, for section 26 (we.f. 13-11-1982).
2. Ins. by s. 14, ibid. (w.e.f. 13-11-1982).
3. Subs. by s. 16 and the Schedule, ibid., for “the capital of a Corporation” (w.e.f. 13-11-1982).
4. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
5. Subs. by Act 63 of 1982, s. 16 and the Schedule, for “raises its capital” (w.e.f. 13-11-1982).
6. Subs. by Act 28 of 1959, s. 6, for “and the balance shall be made over to the State Government for the purpose of road
development” (w.e.f. 1-9-1959).
14
31. Power of the Corporation to spend.—A Corporation shall have power to spend such sums as it
thinks fit on objects authorised under this Act and such sums shall be treated as expenditure payable out
of the fund of the Corporation.
32. Budget.—(1) Every Corporation s hall, by such date in each year as may be prescribed, prepare
and submit to the State Government for approval a budget for next financial year showing the estimated
receipts and expenditure during that financial year in such form as may be prescribed.
(2) Subject to the provisions of sub-sections (3) and (4), no sum shall be expended by or on behalf of
a Corporation unless the expenditure of the same is covered by a current budget grant approved by the
State Government.
(3) 1[Subject to such conditions and restrictions as may be specified in this behalf by the State
Government, a Corporation may sanction] any re -appropriation within the grant from one head of the
expenditure to another or from a provision made for one scheme to that in respect of another, su bject to
the condition that the aggregate budget grant is not exceeded.
(4) A Corporation may, within such limits and subject to such conditions as may be prescribed, incur
expenditure in excess of the limit provided in the budget approved by the State Gov ernment under any
head of expenditure or in connection with any particular scheme.
2[33. Accounts and audit.—(1) The Corporation shall maintain proper accounts and other records
and prepare an annual statement of accounts including the profit and loss account and the balance sheet in
such form as may be prescribed by the State Government in consultation with the Comptroller and
Auditor-General of India.
(2) The accounts of a Corporation shall be audited annually by the Comptroller and Auditor -General
of India or his nominee and any expenditure incurred by him in connection with such audit shall be
payable by the Corporation to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor -General of India and any person appointed by him in connection
with the audit of the accounts of a Corporation shall have the same rights, privileges and authority in
connection with such audit as the Comptroller and Auditor -General of India has in connection with the
audit of the Government accounts , and, in particular, shall have the right to demand the production of
books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of
the Corporation.
(4) The accounts of the Corporation as certified by the Comptroller an d Auditor-General of India or
any person appointed by him in this behalf together with the audit report thereon shall be forwarded
annually to the State Government; and that Government shall cause the same to be laid before 3[each
House of Parliament].]
CHAPTER V
MISCELLANEOUS
34. Directions by the State Government.—(1) The State Government may, after consultation with a
Corporation established by such Government, give to the Corporation general instructions to be followed
by the Corporation, and such instructions may include directions relating to the recruitment, conditions of
service and training of its employees, wages to be paid to the employees, reserves to be maintained by it
and disposal of its profits or stocks.
(2) In the exercise of its power s and performance of its duties under this Act, the Corporation shall
not depart from any general instructions issued under sub-section (1) except with the previous permission
of the State Government.
Excerpt shown. Open the full act in Lexace.