Currently India has three laws covering the domain of road transportation in
- Motor Vehicles Act, 1988
- Road Transport Corporation Act, 1950
- 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
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
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
, 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
Chapter 7 - Construction, Equipment And Maintenance Of Motor Vehicles (Sections
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
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 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.
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
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.
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.
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. 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
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
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
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
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
The statute also stresses on the importance of carrying a goods forwarding note
and makes it mandatory, 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.
It is also important to note that our legal structure recognises the principles
of absolute liability.
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-ŕ-vis the tortious
principle of strict liability as laid down in the case of Rylands v. Fletcher
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
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
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.
However the statute is criticized 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
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.
- AIR 1959 SC 308
- Section 3, Motor Vehicles Act, 1988
- Section 181, Motor Vehicles Act, 1988
- Passenger vehicle sales see sharpest drop in 20 years in 2019, available
(Visited on March 12, 2021
- Sections 29-30, Motor Vehicles Act, 1988
- Rashmi Banga, “CRITICAL ISSUES IN INDIA’S SERVICE-LED GROWTH”, in e
ICRIER Working Paper Series (2005).
- Section 3, Carriage by Road Act, 2007 (Act 41 OF 2007)
- Section 18, Carriage by Road Act, 2007 (Act 41 OF 2007)
- Section 8, Carriage by Road Act, 2007 (Act 41 of 2007)
- Section 12(1), Carriage by Road Act, 2007 (Act 41 of 2007)
- M.C. Mehta V UOI, AIR 1987 SC 1086
-  UKHL 1
- Road Safety and Transport Bill, 2014: Will it make Indian roads safer?,
available at: https://blog.ipleaders.in/road-safety-and-transport-bill-2014-will-it-make-indian-roads-safer/
(Visited on March 12, 2021)
- India’s draft road safety bill focuses more on penalty and technology,
available at: https://www.downtoearth.org.in/news/indias-draft-road-safety-bill-focuses-more-on-penalty-and-technology-47122 (Visited
on March 13, 2021)