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Analysis of the Road Transport Laws in India

Currently India has three laws covering the domain of road transportation in India.
They are:

  1. Motor Vehicles Act, 1988
  2. Road Transport Corporation Act, 1950
  3. Carriage by Road Act, 2007

These statutes do not serve a singular purpose but have different functions in making road transportation easier and safer.

The Motor Vehicles Act, 1988 which came into force from 1 July 1989 and replaced the Motor Vehicles Act, 1939 aims at consolidating and amending the laws relating to motor vehicles. However judging by the entire statute, it seems the chief aim of the statute was to ensure road transportation and motor vehicle safety, as the entire statute deals with provisions relating to licensing of drivers/conductors, registration of motor vehicles, control of motor vehicles through permits, special provisions relating to state transport undertakings, traffic regulation, insurance, liability as well as offences and penalties if the above provisions are violated.

The Road Transport Corporation Act, 1950 was enacted soon after India�s independence and aimed at enabling the states to provide for its citizens suitable and economical transportation services considering the lack as well as the hidden disdain of private players. The statute enabled the State Governments to set up corporations so as to provide the aforementioned services whilst also providing ancillary services.

The Carriage by Road Act, 2007 was enacted with the aim of regularising common carriers and limiting their liability as to the goods carried by them when damage or loss happens to the goods being carried by them that is not occasioned by criminal or negligible acts by the carriers. The statute also causes the consignee having to declare the value of the goods being delivered so that an appropriate liability can be determined upon for the loss of or damage done to the goods because of negligence or criminal acts of the carrier or their agents and servants.

As can be seen, the three statutes combined covers a great area over all matters road transportation related. A statute known as the Road Transport Safety Bill is in the works since 2014, which aims at improving road safety in India, which is a growing concerns among motorists, all over India.

It shall also be analysed in depth to find out the workings of the statute, its weaknesses, strengths and whether any changes and should be recommended in the Bill.

Analysis of the Laws at Present and their suggested Reforms

Since each of the laws cover a lot of ground in transportation related areas, we shall deal with the statutes, one by one.

In order to seek the reason behind the enactment of statutes, it is imperative to compare them with the economic and social conditions prevailing at the time of their enactment.

The Road Transport Corporation Act, 1950

This statute was brought in soon after the country�s independence when the private sector economy was in tatters. It should also be taken note that although India was supposed to be a mixed economy, it was in fact leading a lot more towards communist approaches and this statute is a testament to that fact.

In fact in the case of Nageswara Rao Somasankara Sastri v. The Andhra Pradesh State Road Transport Corporation[1], the Supreme Court held that the provisions of the statute has to be interpreted in light of the Government�s desire for increasing state control on road transport.

The Government had enacted the statute with the aim of nationalizing road transporation and reducing private players in the market. The statute resulted in the establishment of monopolies in different routes and thereby caused the State Road Transport Corporations and Authorities to be highly ineffective in their operations causing huge losses to the Government exchequer.

However as of now, the statute mostly allows the operations of private players on different routes thus creating a balanced playing field for all parties.

The statute should aim for greater private participation in the road transport corporations as that would encourage public-private partnership leading to a more secure but efficient road transport organization. Considering the growing public demands and the need for maintaining competition, a public-private partnership will boost competition in the market as well as provide transportation services for the public.

The Motor Vehicles Act, 1988

This statute replaced the highly outdated Motor Vehicles Act, 1939 and also aimed at consolidating and amending the laws relating to motor vehicles. The statute is a highly comprehensive act and helps regulate motor vehicular transportation in the country.

The Statute is divided into the following chapters

Chapter 1 � Preliminary (Sections 1-2)
Chapter 2 - Licensing Of Drivers Of Motor Vehicles (Sections 3-28)
Chapter 3 - Licensing Of Conductors Of Stage Carriages (Sections 29-38)
Chapter 4 - Registration Of Motor Vehicles (Sections 39-65)
Chapter 5 - Control Of Transport Vehicles (Sections 66-96)
Chapter 6 - Special Provisions Relating To State Transport Undertakings (Sections 97-108)
Chapter 7 - Construction, Equipment And Maintenance Of Motor Vehicles (Sections 109-111)
Chapter 8 - Control Of Traffic (Sections 112-138)
Chapter 9 - Motor Vehicles Temporarily Leaving Or Visiting India (Sections 139)
Chapter 10 - Liability Without Fault In Certain Cases (Sections 140-144)
Chapter 11 - Insurance Of Motor Vehicles Against Third Party Risks (Sections 145-164)
Chapter 12 - Claims Tribunals (Sections 165- 176)
Chapter 13 - Offences, Penalties And Procedure (Sections 177-210 )
Chapter 14 � Miscellaneous (Sections 211-217A)

A brief analysis of the chapters presents to us the fact that the entire statute has been enacted with the conscious intention to improve road safety. Chapter 2 aims at licensing of drivers using motor vehicles[2] and Chapter 13 punishes offenders for several driving related offences such as driving motor vehicles without an effective driving license or driving under the age of 18 years wherein he / she can not acquire a driving license.[3]
Accidents in India are highly common and although the State Governments have tried several means to reduce them, the fact remains that it is very difficult to curb motor vehicular accidents in India, having one of the highest road transport densities in the world as well as the second highest population in the world.

Although prevention is better than cure, the Government of India, thought well to enact in Section 146 of the Motor Vehicles Act, 1988. The provision makes it mandatory for any motor transport owner to obtain third party insurance in case of any liability incurred by him for any accident that may occur causing bodily harm or death or damage to any property caused by or arising out of the use of the vehicle in a public place.

Further Section 196 of the statute penalises driving a vehicle in a public place without a requisite insurance policy by imprisonment which may extend to 3 months or with fine which may extend to Rs 1000.

However Sections 140-144 prescribe certain no-fault liabilities on drivers of motor vehicles. Although the provision is intended to be for public welfare, it may result in insurance agencies to charge higher premium on motor vehicle owners leading to a stagnation in vehicular transportation sector as the country faced a little before the Corona virus epidemic[4].
However, how far the provisions play a role in this is doubtful.

Since stage carriages are heavy vehicles, we can further understand the motive of the Government to license their conductors who play an important role in ensuring that safety measures are followed in the carriages[5].

A much needed change that needs to be brought in is the inclusion of electric motor-cycles in the category of motor-vehicles. Not having an engine, these drivers are not subject to the same rules as the other vehicle owners which are regulated under the statute. This causes highly unsafe roads as the drivers are not checked as to their driving ability and neither do they require to follow the same legal rules that ensure driver and passer-by safety.

The Carriage by Road Act, 2007

The Carriage by Road Act, 2007 was enacted after India�s economy was opened from the shackles and when private players were granted greater economy to enter into its service sector.

It is to be noted that India, suffering from its constrictive labour laws, had greater incentives for its private players to enter into the service sector economy.[6] Therefore, transportation being a vastly major part of the service sector, it was at this time that India witnessed a great leaps in its carriage services � both by rail and road.

However, road transportation carried the greater portion of the goods and the Government thought it wise to enact a law which would protect the small players of the private sector from massive liabilities and suits from other large corporations that could crush their businesses.

Thus the Carriage by Road Act was enacted which aimed at enabling responsible carrier service providers operating in the market by getting registered with the competent authority.
In order to regularise and prevent fraud in carrier transportation, the Government makes it mandatory for common carriers to have to register themselves as a common carrier via Section 4 of the Carriage by Road Act, 2007 and prohibits individuals to operate as common carriers via Section 3 of the same statute.[7]

Further Section 18 penalises carriers operating without proper registration and prescribes a fine which may extend to five thousand rupees, and for the second or subsequent offence with fine which may extend to ten thousand rupees for the offender.[8]
This would weed out unauthorised and unsafe carriers whilst simultaneously ensuring greater road safety.

However, the Act also goes beyond simple regulation of carriers and seeks to protect carriers by limiting their liability from loss or damage or delay caused to the consignment to only the transportation charge, if it was caused not due to the negligence or criminal acts of the carrier.

The Carriage by Road Act 2007 helps limit the liability of the common carrier as provided under Section 10.

According to Section 10(1) the liability of the common carrier for loss of, or damage to any consignment, shall be limited to such amount as may be prescribed with regard being to the value, freight and nature of goods, documents or articles of the consignment as provided by the consignor himself, unless the consignor or his agent or servant or for that matter any person, duly authorised in that behalf have expressly undertaken to pay higher risk rate fixed by the common carrier under section 11.

Basically when a common carrier transports hazardous substances, he can ask for additional charges for the risk undertaken in carrying hazardous substances.

As for Section 10(2), if there is any delay which damages the consignment or causes its loss thereof, the liability shall be limited to the transportation cost.

However, if the delay or loss is due to the inspection or seizure of the goods by any competent authority, the carrier shall not be liable, as provided in Section 12 (3).

Further, if a criminal or negligible act of the common carrier causes the loss or damage to the consignment, then the common carrier will be fully liable for the consignment and his liability will not be limited, as laid down in Section 12.

The statute also stresses on the importance of carrying a goods forwarding note and makes it mandatory[9], going even as far as preventing the carrier from having to undertake any loss caused to any such goods that were not mentioned in the goods forwarding note.[10]

It is also important to note that our legal structure recognises the principles of absolute liability[11].

According to the principles of absolute liability, where any person or enterprise is engaged in a hazardous or inherently dangerous activity and this results in harm to anyone on account of any accident in the operation of such hazardous or dangerous activity, the person or enterprise is absolutely liable to compensate all those who are affected by the accident. This form of liability is not subject to any of the exceptions which operate vis-�-vis the tortious principle of strict liability as laid down in the case of Rylands v. Fletcher[12].

It is with that aim that Section 13(3) makes it mandatory for a consigner to cover any consignment containing any dangerous or hazardous substance being transported under one or more insurance policies so as to provide relief in case of death or injury to a person or damage to any property or the consignment, if an accident takes place during the transportation.

This provision helps in ensuring that the consigner will be able to pay compensation if any accident takes place.

The statute does not require any changes as it can be seen that most carriers would not want to lose their transportation fee and therefore it is a sufficient deterrent to make them ensure that the delivery occurs in time which will prevent damage or loss to the consigner concerned.

Further, introducing the risk charge via Section 11 is a very welcome provision as it will motivate carriers to take further safety measures in order to ensure risk-free delivery of hazardous or dangerous goods or substances.

A Critical Analysis of the Upcoming Road Transport Safety Bill, 2014

The Road Transport Safety Bill was a pioneer of a statute that aimed at reducing over 200,000 casualties due to road accidents and help in boosting the state�s GDP by 4% on account of increased efficiency and safety of road transport sector.

The fact of the matter is while most laws focus on improving safety and making vehicles go slow, it oversees the fact that slow car movement can cause transportation inefficiencies causing the GDP to slump.

It is for this reason that Germany has Autobahns where a person can not get out of his / her car and nor can any person walk on the road. Similarly, several highways in US and UK have no speed limits.

However, the conditions of roads and the population in India being different, the Government sought to use technology and private-public participation to improve road safety and efficiency in transportation via the Bill.

Section 4 of Chapter 2 of the Bill aims at establishing a national Road Safety Authority whose functions as per Section 12 of the Bill aim at improving road safety, adopting newer technologies for the same and also foreseeing on the improvement of manufacturing quality of cars and that they are manufactured without defects.

In order to improvise the existing process, there would be a unified vehicle registration system, single National Road Transport and Multinational Coordination Authority (for improving quality of road transportation, developing integrated transport system by ensuring last mile connectivity by feeder bus services and multi modal hubs) and Goods Transport and National Freight Policy ( for increase in logistics to combat inflation by steps like simplified and single portal clearance, addressing the bottlenecks of the trucking industry etc); a transparent single-window automated driving license system including biometric systems to avoid license duplication. The application and issuance procedures for driving licensing system would be simplified and technology would be adopted for driver testing facilities.[13]

However the statute is criticized[14] for ignoring urban road design principles which help improve transportation speeds whilst also ensuring more safety for all individuals concerned. The statute is also heavily focused on incorporation of technology. As such, it is felt that if states do not come forward heavily in its implementation, the entire statute can go to waste. Further the high fines listed in the statute has resulted in large criticisms from all sectors as it is felt the income per capita of individuals engaging in road transport is too less to be able to pay the fines.

As such, it can be seen that the transportation industry is in the midst of a revolution. With increasing FDI, massive growth of electric vehicular market in the transportation sector, the Government should make appropriate legislations for them.

Considering the highly inefficient usage of India�s road networks and their backdated design, the Government should add them in the bill as well as make sure the States are capable of integrating their information services and that the legislation actually gets implemented in the states concerned.

It has been seen time and again that greater public-private partnership improves the efficiency, workability and implementation of a statute. Therefore the Government should go ahead in its decision on enacting the Road Transport Safety Bill, 2014 whilst making the necessary amendments and ensuring the public get access to better, safer, speedier and more efficient road system.


  1. AIR 1959 SC 308
  2. Section 3, Motor Vehicles Act, 1988
  3. Section 181, Motor Vehicles Act, 1988
  4. Passenger vehicle sales see sharpest drop in 20 years in 2019, available at: (Visited on March 12, 2021
  5. Sections 29-30, Motor Vehicles Act, 1988
  6. Rashmi Banga, �CRITICAL ISSUES IN INDIA�S SERVICE-LED GROWTH�, in e ICRIER Working Paper Series (2005).
  7. Section 3, Carriage by Road Act, 2007 (Act 41 OF 2007)
  8. Section 18, Carriage by Road Act, 2007 (Act 41 OF 2007)
  9. Section 8, Carriage by Road Act, 2007 (Act 41 of 2007)
  10. Section 12(1), Carriage by Road Act, 2007 (Act 41 of 2007)
  11. M.C. Mehta V UOI, AIR 1987 SC 1086
  12. [1868] UKHL 1
  13. Road Safety and Transport Bill, 2014: Will it make Indian roads safer?, available at: (Visited on March 12, 2021)
  14. India�s draft road safety bill focuses more on penalty and technology, available at: (Visited on March 13, 2021)

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