Section 223 in Road Transport Corporations Act, 1950
223.
Statement of Objects and Reasons.-The Road Transport Corporations Act, 1948 (XXXII of 1948), was enacted with a view to enable the Provincial Governments, who may so desire, to establish Road Transport Corporations. This Act has been found defective because the provisions of sections 3(2), 4 and 5 of the Act, insofar as they require certain provisions to be made by a Provincial law, are ultra vires of the Government of India Act, 1935, as adapted. Under the latter Act, the power to legislate in respect of trade and commerce is given to the provincial Legislatures and the power to legislate for the incorporation of trading corporations is given to the Central Legislature. The creation of statutory Transport Corporations has been held as amounting to incorporation of trading corporations and, as such, ultra vires of the Provincial Legislature. In order to remove the above mentioned legal flaw, it is proposed to replace the existing Act, by a comprehensive Act, enabling such of the Provincial Governments, who may so desire, to set up Transport Corporations, with the object of providing efficient, adequate, economical and property co-ordinated system of road transport services.Amendment Act 63 of 1982-Statement of Objects and Reasons.-The Road Transport Corporations Act, 1950 was enacted to enable State Governments to set up Transport Corporations with the object of providing efficient, adequate, economical and properly co-ordinated system of road transport services. In the light of the changed circumstances, the suggestions which have been received from the State Governments, different Ministries of the Central Government and other agencies concerned, it is proposed to make certain amendments in the said Act with a view primarily to secure the better functioning of the Road Transport Corporations under the Act.2. The more important amendments proposed in the Bill are the following:-(a) Section 1 of the Act is being amended to provide for the extension of the Act to the Union territory of Mizoram (vide clause 2).(b) The organisational set up of the Road Transport Corporations under the Act is being modified to provide for each Corporation a Board of Directors consisting of a Chairman and other Directors in place of the Chairman and members of the Corporation. This approach would help in keeping the agency through which a Corporation has to function distinct from the Corporation itself. It is also proposed to provide that in addition to the Chairman, each Board may consist of not less than five and not more than seventeen other Directors (vide clause 3).(c) Section 8 of the principal Act is being amended, inter alia, for including therein provisions for removal of the Chairman or any other Director on grounds of misconduct (including abuse of power and corruption vide clause 5(b).)(d) In the context of the growing activities of the Corporations, it is felt that certain activities of a Corporation could be better attended to by subsidiary Corporations. To facilitate this process, provision is being included to enable each Road Transport Corporation to frame, with the concurrence of the State Government concerned and the Central Government, scheme or schemes providing for the establishment of one or more subsidiary Corporations (vide clause 10).(e) At present, a Road Transport Corporation cannot raise any share capital where loan capital has been provided to it by the Central Government and the State Government. With a view to augmenting the resources of the Corporation and to enable the Corporations to undertake developmental schemes, section 23 of the principal Act is being amended to enable a Corporation which has received a loan capital from the Central Government and the State Government to raise share capital. Opportunity is also being taken to enable the Central Government or the State Government to convert the whole or any part of the loan capital provided by it under the said section 23 into share capital (vide clause 12).(f) Section 26 of the principal Act relating to borrowing powers of Road Transport Corporations is being substituted by a new section to enable a Corporation, with the approval of the State Government, to borrow money not only in the open market, but also from the nationalised banks, State Financial Corporations, the Industrial Finance Corporation of India, the Industrial Development Bank of India, the Life Insurance Corporation of India, or any other financial institution providing credit which is subject to the Control of the Reserve Bank of India. Such borrowing may be either for the purpose of raising working capital or for meeting any expenditure of a capital nature (vide clause 13).[ 4th December, 1950 ]An Act to provide for the incorporation and regulation of Road Transport Corporations.Be it enacted by parliament as follows:-
