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THE ROAD TRANSPORT CORPORATIONS ACT, 1950

Title : THE ROAD TRANSPORT CORPORATIONS ACT, 1950

Year : 1950



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 coordinating 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 the whole or any part of the State under such name as may be specified in the notification.



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.



(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 as the Vice-Chairman of the Board.

(4) Rules made under this Act shall provide for the representation, both of the Central Government and of the State Government concerned, on the Board in such proportion as may be agreed to by both the Government and of appointment by each Government of its own representatives thereto and where the capital of a Corporation is raised by the issue of shares to other parties under sub-sec. (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 share-holders.

(5) The term of office of and the manner of filling casual vacancies among the Directors shall be such as may be prescribed.]



1*[(1)] A person shall be disqualified for being chosen as, or for being, a2*[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 interest 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.

3*[(2) Nothing in clause (d) of sub-section (1) shall be deemed to disqualify the4*[Managing Director of a Corporation for being chosen as, or for being, a5*[Director] thereof.]

6*[(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.]

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1. Original section 6 was renumbered as sub-section (1) thereof by the Road Transport Corporations (Amdt.) Act, 1959 (28 of 1959), section 2 (1-9-1959).

2. Substituted for the words "member of a Corporation" by the Road Transport Corporation's (Amdt.) Act, 1982 (63 of 1982), section 4(a) (15-11-1982).

3. Inserted by the Road Transport Corporations (Amdt.) Act, 1959 (28 of 1959), section 2 (1-9-1959).

4. Substituted for the words "Chief Executive Officer or General Manager" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 4(b) (15-11-1982).

5. Substituted for the word "member" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 4(b) (15-11-1982).

6. Inserted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 4(b) (15-11-1982), S.4(c) (15-11-1982).

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The Chairman or any other1*[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.

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1. Substituted for the word "member" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and the Schedule. (15-11-1982).

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1*[1] The State Government may remove from office the Chairman or any other1*[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 the2*[Board].

Provided that no3*[Director appointed] by the Central Government shall be removed from office without the concurrence of that Government.

4*[(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 Government shall not be terminated under this sub-section without the concurrence of that Government."]

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1. Section 8 renumbered as sub-section (1) thereof and in sub-section (1) as so renumbered the word, "member" substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 5(a)(i) (5-11-1982).

2. Substituted for the word "Corporation" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 5(a)(i) (5-11-1982), section 5(a)(ii).

3. Substituted for the words "member nominated" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 5(a)(i) (5-11-1982), section 5(a)(iii).

4. Inserted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 5(a)(i) (5-11-1982), section 5(b) (5-11-1982).

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No act or proceeding of a Corporation shall be invalid by reason only of the existence of any vacancy2*[in its Board] or any defect in the constitution thereof.

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1. Substituted for the word "Corporation" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and Schedule. (15-11-1982).

2. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and Schedule. (15-11-1982) for the words "amongst its members."

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(1) A1*[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 the1*[Board] under sub-section (1) for any purpose shall have a right to take, part in the discussions of the1[Board] relevant to that purpose, but shall not have a right to vote at a meeting of the1*[Board].

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1. Substituted for the word "Corporation" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and Schedule. (15-11-1982).

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(1) A1*[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 the1*[Board] shall meet at least once in every three months.

(2) The person to preside at a meeting of a1[Board shall be the chairman thereof, or in his absence from any meeting the Vice-Chairman, if any, or in the absence 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 a1*[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.

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1. Substituted for the word "Corporation" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and the Schedule. (15-11-1982).

2. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and the Sch. (15-11-1982) ,for the words "such member as may be chosen by the members present."

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1*[(1)] A 1*[Board] may from to time, by resolution passed at a meeting-

(a) Appoint committees 2*[consisting of Directors] for performing such functions as may be specified in the resolution;

(b) Delegate to any such committee or to the Chairman or Vice-Chairman, 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 3*[Managing Director] 4*[or any other officer of the Corporation] subject to 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.

5*[(2) The Chairman, Vice-Chairman or Managing Director may delegate any of his powers and duties [including powers and duties delegated to him under sub-section (1)] to any officer of the Corporation, 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."]

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1. Section 12 renumbered as sub-section (1) thereof and in sub-section (1) as so renumbered in opening portion the word "Corporation" substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), Section. 6(a)(i) (15-11-1982).

2. Substituted for the words "of its members" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), Section. 6(a)(i) (15-11-1982), section 6(a)(ii).

3. Substituted for the words "Chief Executive Officer or General Manager" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), Section. 6(a)(i) (15-11-1982), section 6(a)(iii).

4. Inserted by the Road Transport Corporation (Amdt.) Act, 1959 (28 of 1959), section 3(1-9-1959).

5. Inserted by the Act 63 of 1982, section 6(b) (15-11 1982).

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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.

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1. Substituted by the State Corporations (Amdt.) Act, 1982 (63 of 1982), section 7(15-11-1982).

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1*[( 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 appoint2*[a Secretary and such other officers and employees] as it considers necessary for the efficient performance of its functions,

3*[(3) The conditions of appointment and service and the scales of pay of the officers and employees 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 such, 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.

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1. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 8(a) (15-11-1982).

2. Substituted for the words "such other officers and servants," by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 8(a) (15-11-1982), section 8(b).

3. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 8(a) (15-11-1982), section 8(c).

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(1) The Managing Director shall be the executive head of the Corporation and all other 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.

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1. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 9(15-11-1982).

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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 any other road transport undertaking shall become or remain an1*[officer or other employee] of the Corporation.

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1. Substituted for the words "officer or servant" by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and the Schedule. (15-11-1982).

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The State Government may, after ascertaining the views of the Corporation, by notification in the Official Gazette, constitute one or more Advisory Councils consisting of such number of persons, on such terms, and for the purpose of advising the Corporation on such matters, as may be specified in that notification.

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 framed under sub-section (1) shall specify the subsidiary corporation or corporations which shall become established there under, the date or dates with effect from which they shall be so established, the powers and functions of the parent Corporation which such 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;

(c) The liability of the Central Government to provide contribution to the capital of the subsidiary corporation 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 parent 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."

Last updated on August, 2016

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