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THE ROAD TRANSPORT CORPORATIONS ACT, 1950

Title : THE ROAD TRANSPORT CORPORATIONS ACT, 1950

Year : 1950



It shall be the general principle of a Corporation that in carrying on its undertaking it shall act on business principles.



(1) The Central Government and the State Government may provide to a Corporation established by the State Government, in such proportion as may be agreed to by both the Government, any capital that may be required by the Corporation for the purpose of carrying on the undertaking or for purposes connected therewith on such terms and conditions, not inconsistent with the provisions of this Act, as the State Government may, with the previous approval of the Central Government, determine.

1*[(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 maybe, by converting the whole or any part of the capital provided 1*[whether before or after the commencement of the Road Transport Corporations (Amendment) Act,1982] to the Corporation by that Government under sub-section (1);

(3) The 2*[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, the Central Government and other parties (including persons whose undertakings have been acquired by the Corporation) shall also be determined by the State Government in consultation with the Central Government.

(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, reĀ¬deem the shares issued to the other parties under sub-section (4) in such manner as may be prescribed.

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1.Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982),section 12(a) (15-11- 1982).

2.Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982),section 12(a) (15-11- 1982), for the words "authorised capital,"

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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)1*[(2A)] (3), (4), (5) and (6) of the said section shall apply to the issue of such shares.

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1. Inserted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 16 and the Schedule. (15-11-1965),

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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.



A Corporation may, with the previous approval of the State Government, 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, or section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, a State Finance Corporation established under section 3 of the State Financial Corporations Act, 1951, the Industrial, Finance Corporation of India, established under section 3 of the Industrial Finance Corporation Act, 1948 the Industrial Development Bank of India, established under section 3 of the Industrial Development Bank of India Act, 1964, the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956, or any other financial institution providing credit which is subject to the control of the Reserve Bank of India."

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1. Substituted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 13 (15-11-1982).

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(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 1*[or with the corresponding new banks constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] or invested in such securities as may be approved by the State Government.

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1. Inserted by the Road Transport Corporations (Amdt.) Act, 1982 (63 of 1982), section 14(5-11-1982).

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(1) Where 1*[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 in consultation with the Central Government and such interest shall be deemed to be a part of the expenditure of the Corporation.

(2) Where the Corporation 2*[raise 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 in consultation with the Central Government, and such dividend shall be deemed to be a part of the expenditure of the Corporation.

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1. Substituted for the words "the capital of a 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 Schedule (15-11-1982), for the words "raises its capital."

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(1) A Corporation shall make such provisions for depreciation and for reserve and other funds as the State Government 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.



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, welfare of labour employed by the Corporation and for such other purposes as may be prescribed with the previous approval of the Central Government,1[and out of the balance such amount as may, with the previous approval of the State Government and the Central Government, be specified 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.]

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1. Substituted for the words "and the balance shall be made over to the State Government for the purpose of road development" by the Road Transport Corporations (Amdt.) Act, 1959 (28 of 1959), section 6 (1-9-1959).

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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.



(1) Every Corporation shall, 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, subject 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 Government under any head of expenditure or in connection with any particular scheme.

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1. Substituted for the words "A Corporation may sanction" by the Road Transport Corporations (Amdt.) Act, 1959 (28 of 1959), section 7 (1-9-1959).

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(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 and 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 the Legislature of the State.]

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1. Substituted for the original section 33 by the Road Transport Corporations (Amdt.) Act, 1959 (28 of 1959), section 8 (1-9-1959).

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Last updated on September, 2016

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