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Section 16 of The Road Transport Corporations Act, 1950

General disqualification of all officers and servants.

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 an 1[officer or other employee] of the Corporation.

Summary

No person can be an officer or employee of the Corporation if they have a personal stake in its contracts.
This rule applies whether the interest is direct or indirect.
A person is disqualified if they have any share or interest in any other road transport business.
This restriction includes interests held through a partner or an agent.
The rule prevents someone from joining the Corporation and also prevents them from staying if they gain such an interest.

Practical examples

1Arjun wants to apply for a mechanic job at the State Transport Corporation, but he also owns a 20 percent stake in a private bus company called City Travels. Under this law, he cannot be hired because of his financial interest in another transport undertaking.

2Priya is a senior manager at the Corporation, and her husband starts a company that wins a contract to supply engine oil to the bus fleet. Because Priya has an indirect interest in this contract through her partner, she must leave her position at the Corporation.

FAQ

1. Can a part-time consultant work for the Corporation if they also own a private taxi fleet under The Road Transport Corporations Act, 1950?

No, Section 16 of the Road Transport Corporations Act, 1950, states that any person with an interest in another road transport undertaking is disqualified from being an officer or employee.

2. Does Section 16 of The Road Transport Corporations Act, 1950, apply if I only have a small indirect interest in a contract?

Yes, Section 16 of the Road Transport Corporations Act, 1950, prohibits any person with either a direct or indirect interest in a contract with the Corporation from being an employee.

3. If I am already an employee and I inherit shares in a private trucking company, what happens under the Road Transport Corporations Act?

According to Section 16 of the Road Transport Corporations Act, 1950, you cannot remain an employee if you have an interest in another road transport undertaking.

Test yourself

1.Under Section 16 of The Road Transport Corporations Act, 1950, which of the following people is allowed to be an officer of the Corporation?

2.Does Section 16 of The Road Transport Corporations Act, 1950, cover interests held through an agent?

3.According to Section 16 of The Road Transport Corporations Act, 1950, what is the consequence for an employee who acquires an interest in a contract with the Corporation?

4.Under Section 16 of The Road Transport Corporations Act, 1950, what type of outside business is specifically mentioned as a disqualification?

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